value of inventories of stores, supplies, and/or equipment at the end of each accounting period, after which any balance therein shall be charged or credited, as the case may be, to the last voyage of each vessel involved terminated during the accounting period.

(b) The accounts will not be used in instances where inventories of stores, supplies, and/or equipment are taken and priced at the end of each voyage.

(c) The balance in the account at the end of each accounting period, applicable to the subsequent accounting period, will be reflected in balance sheet account 200, "Unterminated voyage expense."

§ 282.095 Profit and loss account.

At the end of the accounting year this account shall be credited or charged, as the case may be, with the balances in all ordinary, extraordinary and prior period revenue and expense accounts, except where otherwise specifically indicated. After all entries have been made, the account shall reflect the net income for the accounting year. The net balance in this account after adjustments have been made for the accounting year shall be transferred to account 599, "Earned surplus; unappropriated."

[G.O. 22, Rev., Amdt. 6, 32 FR. 20777, Dec. 23, 1967]

PART 284-VALUATION OF VESSELS
FOR DETERMINING CAPITAL EM-
PLOYED AND NET EARNINGS
UNDER OPERATING-DIFFERENTIAL
SUBSIDY AGREEMENTS

Sec.
284.1 Vessels included.
284.2 Basis of valuation.

AUTHORITY: The provisions of this Part 284 issued under sec. 204, 49 Stat. 1987, as amended; 46 U.S.C. 1114; Pub. Law 86-518, 74 Stat. 216. Interpret or apply secs. 9 and 12(d), 60 Stat. 46, 50; 50 U.S.C. App. 1742, 1745.

SOURCE: The provisions of this Part 284 contained in General Order 24, 3d Revision, 25 F.R. 7536, Aug. 10, 1960; 25 F.R. 7740, Aug. 18, 1960.

§ 284.1 Vessels included.

The vessels to be valued pursuant to the provisions of this part are (a) all vessels subsidized under operating-differential subsidy agreements, (b) all vessels owned by the operator not so subsidized when, by reason of employment of such vessels in the subsidized services, the Maritime Administration has required that, for the period of such employment,

the value of such vessels be included in the computation of capital necessarily employed in such subsidized services, and (c) all other vessels owned by the operator in those cases where it is necessary to determine the value thereof for the purposes of § 286.3(c) of this subchapter. [Gen. Order 24, 3rd Rev., 25 F.R. 7536, Aug. 10, 1960; 25 F.R. 7740, Aug. 13, 1960] § 284.2 Basis of valuation.

(a) General. Except as hereinafter otherwise set forth, vessels shall be valued at the actual cost of acquisition (not the cost of replacement or reproduction), subject to the adjustments provided for hereinafter.

(b) Acquisition from other than a predecessor or "related company”—(1) For cash or equivalent. The cost of acquisition of vessels acquired from other than a predecessor, or a subsidiary company, holding company, affiliate company, or associate company, of the operator (herein referred to as a "related company"), for cash or a consideration determined by the Maritime Administration to be the equivalent of cash, shall be the purchase price plus any

other expenditures which the Maritime Administration determines to be properly capitalizable as part of the cost of acquisition. There shall not be included therein commissions paid officers or directors of, or stockholders having a substantial stock interest in, the operator or a related company, or adjustments attributed to restricted trade or other provisions (if any) in contracts under which such vessels were acquired. The cost of vessels acquired by the operator from the builders, directly or through the Maritime Administration or predecessor agencies (except a vessel the price of which is adjusted under section 9 of the Merchant Ship Sales Act of 1946), shall include interest accrued during the period of construction on borrowed capital (less interest earned thereon) used to make payments on account of construction (including interest charged by the Maritime Administration on payments made to the builder) and such other expenditures which the Maritime Administration determines to be properly capitalizable.

(2) For consideration other than cash or equivalent. The cost of acquisition of any vessel acquired by the operator from other than its predecessor or a related company for any consideration, the cash value of which, in the opinion of the Maritime Administration, cannot be determined definitely, shall be the fair value of such vessel at the date of acquisition, as determined by the Maritime Administration. The cost of acquisition of any vessel acquired by the operator from the Maritime Administration or predecessor agencies (except a vessel the price of which is adjusted under section 9 of the Merchant Ship Sales Act of 1946) shall be the agreed purchase price for such vessel plus any other expenditures which the Maritime Administration determines to be properly capitalizable as part of the cost of acquisition, notwithstanding the fact that part of the consideration paid to the Maritime Administration or predecessor agencies may consist of mortgage notes of the operator. In general, the Maritime Administration will not undertake to place a value upon securities for the purpose of evaluating a vessel acquired in exchange therefor. No valuation by the Maritime Administration of a vessel acquired in whole or in part for securities shall be deemed to be a determination by the Maritime Administration of the value of such securities.

(3) Vessels subject to section 9, Merchant Ship Sales Act of 1946. The cost of acquisition of a vessel, the price of which is adjusted under section 9 of the Merchant Ship Sales Act of 1946, shall be the statutory sales price of the vessel, computed in accordance with section 3(d) of said Act, as of March 8, 1946 if the vessel was acquired by the operator on or before that date or as of the date of the original delivery of the vessel to the operator if contracted for prior to but delivered after March 8, 1946.

(c) Acquisition from a predecessor or related company. The cost of acquisition of any vessel acquired by the operator from its predecessor or from any person who at any time prior to the date of acquisition of such vessel by the operator was a related company, shall be the cost of acquisition (determined as hereinabove set forth) of such vessel from the nearest person in the chain of title who was not at any time prior to the date of his transfer of the vessel either the predecessor to or a related company of the operator or the predecessor to or a related company of the person to whom he transferred title to said vessel, adjusted for the period from the date of such prior acquisition to the date of acquisition by the operator, in the manner hereinafter set forth.

(d) Basing valuation upon "fair value" when deemed necessary. Nothing herein contained shall preclude the Maritime Administration from basing the valuation of any vessel upon the fair value (as determined by the Maritime Administration) of such vessel at the date of acquisition by the operator in any case in which the Maritime Administration shall deem such method to be necessary for the proper determination of valuation.

(e) Adjustments for betterments, reconstruction, or reconditioning. For the purpose of (1) determining the value of the vessel as of any date subsequent to the date of acquisition by the operator, or (2) determining the adjustments to be made for the period between the date of acquisition by the predecessor or a related company of the operator and the date of acquisition by the operator (when in accordance with the provisions of this part such cost of prior acquisition is properly applicable), allowance shall be made for the net cost of all