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AFMD-81-26 1 (1981-02-04)

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BY THE COMPTROLLER GENERAL



Report To The Congress


OF THE UNITED STATES


Accounting Changes Needed

In The Railroad Industry


In contrast to other industries, which use de-
preciation accounting for capital assests, rail-
roads use a unique betterment accounting
method for their track structure.

GAO believes the Interstate Commerce Com-
mission and the Securities and Exchange
Commission should require railroads to adopt
depreciation accounting. This would enhance
the comparability of railroads' financial report-
ing, assist the Congress in deliberations on reg-
ulatory reform and financial assistance to
railroads, and provide better information to
shippers and small investors.

Rai[roads also should include information on
their maintenance and replacement practices,
including deferred maintenance, in financial
reports.








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     AFMD-81-26
FEBRUARY 4, 1981


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