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121996 1 (1982-12-02)

handle is hein.gao/gaobactcm0001 and id is 1 raw text is: Id . I It


             UNITED STATES GENERAL ACCOUNTING OFFICE           D6   o

                     Washington, D.C.  20548





                                        FOR RELEASE
                                        Thursday, December 2, 1982
    121996



                    Statement for the record

                             by the

                     International Division

                 U.S. General Accounting Office

                        Submitted to the

           Committee on Merchant Marine and Fisheries

             United States House of Representatives



 Mr. Chairman and Members of the Committee:

      We are pleased to present our views on the Panama Canal Com-

mission's  accounting procedures 'for setting aside reserves for

marine accidents.

MARINE ACCIDENT  RESERVE

      From time to time, ships transiting the Canal are involved

 in accidents.  Ship accidents are viewed as a normal and expected

 part of doing business in the Panama Canal.

     The Comiission's marine accident reserve to pay for vessel

damage claims is, in effect, a way of insuring against this normal

business risk and spreading the cost evenly over time.  The reserve

is charged to current operations and is not unlike other business

practices of charging insurance premiums against current operations.

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