Question:

What is the proper accounting for amounts received by companies subject to the FPC Uniform System of Accounts from suppliers of equipment and supplies, arising from claimed overcharges resulting from antitrust violations?

Answer:

Any amounts received arising from claimed overcharges resulting from alleged antitrust violations, including any interest factor, less expenses not heretofore charged to operations attributable to obtaining the refunds, whether such amounts are obtained through negotiation or litigation, shall be applied in the year of settlement to reduce the cost of plant or other accounts with which the materials purchased were associated. If the amounts received are minor and/or applicable to numerous items of properties, companies may with the approval of the Chief Accountant of the Federal Power Commission credit the depreciation reserve account or the current year's construction account. If the amounts received are payable on an installment basis over a period of years and the payments include an interest factor attributable to the delay in making settlement, the interest may be treated as other income. Any amounts received less related expenses should be reduced by any related tax liability.