Sec. 32.2690  Intangibles.

    (a) This account shall include the cost of organizing and 
incorporating the company, the original cost of government franchises, 
the original cost of patent rights, and other intangible property having 
a life of more than one year and used in connection with the company's 
telecommunications operations.
    (b) Subsidiary records for this account shall include a description 
of each class of intangible property.
    (c) The cost of other intangible assets having a life of one year or 
less shall be

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charged directly to Account 6564, Amortization Expense-Intangible. Such 
intangibles acquired at small cost may also be charged to Account 6564, 
irrespective of their term of life.
    (d) This account shall not include any discounts on securities 
issued, nor shall it include costs incident to negotiating loans, 
selling bonds or other evidences of debt, or expenses in connection with 
the authorization, issuance, sale or resale of capital stock.
    (e) When charges are made to this account for expenses incurred in 
mergers, consolidations, or reorganizations, amounts previously included 
in this account on the books of the various companies concerned shall 
not be carried over.
    (f) Franchise taxes payable annually or more frequently shall be 
charged to Account 7240, Operating Other Taxes.
    (g) This account shall not include the cost of plant, material and 
supplies, or equipment furnished to municipalities or other governmental 
authorities when given other than as initial consideration for 
franchises or similar rights. (Note also Account 6728, Other General & 
Administative.).
    (h) This account shall not include the original cost of easements, 
rights of way, and similar rights in land having a term of more than one 
year. Such amounts shall be recorded in Account 2111, Land, or in the 
appropriate outside plant account (see Accounts 2411 through 2441), or 
in the appropriate central office account (see Accounts 2211 through 
2232).