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<br />The system of accounts is based on recognized principles of accounting. It includes <br />a uniform cost classification system for estimating, programming, budgeting, <br />accounting, and subsequent reporting. The project or activity is considered as the <br />"accounting entity" or the level of operation for the maintenance of the accounts. <br />Each project or activity is considered as a basic unit, and is the basis of accounting <br />for its assets, liabilities, income, expenses, funds appropriated, and the investment <br />of the government and facility users. <br /> <br />Cost accounts are maintained on an "applied" or "consumed" basis which reflects <br /> <br /> <br />the value of work performed and equipment installed. The Comptroller General <br /> <br /> <br />considers this to be the best common denominator for program measurement and <br /> <br /> <br />consumption of available resources. <br /> <br />Elements of costs are assigned in the accounting period to which they are <br /> <br /> <br />applicable regardless of the sources of the charges or the time when obligations or <br /> <br /> <br />expenditures (which are fund control mechanisms) are incurred. The term "cost" as <br /> <br /> <br />used in the detailed plant accounts includes not only the materials, supplies, labor, <br /> <br /> <br />services, depreciation on construction facilities and equipment, and other items <br /> <br /> <br />consumed or employed in the construction and installation of plant, but also legal <br /> <br /> <br />fees, damage claims, the cost of preliminary studies, plans, surveys, engineering, <br /> <br /> <br />supervision and general expenses, and the value of contributed property, all of <br /> <br /> <br />which contribute directly and immediately to plant. Interest during construction <br /> <br /> <br />and interest expense are usually imputed only to costs allocated to power and <br /> <br /> <br />municipal and industrial water purposes. <br /> <br />31 <br />