Section 412.10  Definitions

 

When used in this chapter:

 

a)         "Accounts" means the accounts prescribed in this system of accounts.

 

b)

1)         "Affiliated companies" means companies of persons that, directly or indirectly, through one or more intermediary companies, or alone, control, or are controlled by, or are under common control with the reporting licensee.

 

2)         "Control" means the possession of the power to direct or cause the direction of the management and policies of a company or licensee. Such power may be established through a majority or minority ownership or voting of securities, common directors, officers, or stockholders, voting trusts, holding trusts, associated companies, contract or agreement or any other direct or indirect means.

 

c)         "Act" means the Illinois Horse Racing Act of 1975, Ill. Rev. Stat., Ch. 8, Section 37-1 et seq., as now or hereinafter amended.

 

d)         "Board" means the Illinois Racing Board.

 

e)         "Book cost" means the amount at which property is recorded in these accounts without deduction or related provisions for accrued depreciation, amortization, or for other purposes.

 

f)         "Cost" means the amount of money actually paid for property or services. When the consideration given is other than cash, the fair value of the consideration surrendered or the fair value of the asset received, whichever is more clearly evident, should be used to determine cost.

 

g)         "Current assets" is used to designate cash and other assets or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed within one year.

 

h)         "Current liabilities" is used to designate those obligations whose liquidation is reasonably expected to require the use of existing current assets, or the creation of other current liabilities within one year.

 

i)          "Financial statements," as used herein, includes all notes to the statements and all related schedules.

 

j)          "Licensee" means "organization licensee" as defined in Section 3.11 of the Act.

 

Section 412.20  Application of Regulation

 

a)         All licensees shall keep their financial records in the manner prescribed by these rules. In addition, this uniform system of accounts shall also apply to the form and content of all financial statements to be filed as a part of the Application for a license to conduct any racing meeting.

 

b)         These rules are adopted pursuant to the authority granted to the Board in Sections 9(b), 9(c), 9(g), 20(a), 20(a)(5), and 21(c) of the Act (Ill. Rev. Stat., Chapter 8, Section 37-1 et seq.)

 

Section 412.30  Rules of General Application

 

a)         All money amounts required to be shown in financial statements may be expressed in whole dollars.

 

b)         The information required with respect to any statement shall be furnished as a minimum requirement. Further material information shall be added whenever necessary to make the required statements not misleading in the light of the circumstances under which they are made. Conversely, if any amount required to be shown with respect to any caption note or schedule is not material, it need not be shown.

 

c)

1)         Each licensee shall maintain its books of account and all other records and supporting documentation in order to be able to readily furnish to the Board full disclosure of any item included in any account.

 

2)         No licensee shall destroy any such books or records unless prior permission to do so is obtained from the Board. The Board will grant such permission if the books and records are more than five years old.

 

3)         In addition to the prescribed accounts, clearing accounts, temporary accounts and subdivisions of any account may be utilized, provided the integrity of the prescribed accounts is not impaired.

 

4)         Any questions regarding the accounting for a specific item should be submitted to the Board for an interpretation.

 

d)

1)         The account numbering framework used herein consists of a system of three- and four-digit numbers as follows:

 

100.0 – 199.9 Assets and Other Debits

200.0 – 299.9 Liabilities and Other Credits

300.0 – 399.9 Income Accounts

400.0 – 499.9 Expense Accounts

 

2)         In many instances, numbers have been skipped in order to allow for possible later expansion or to permit better coordination of the accounts by the licensees.

 

3)         Each licensee may adopt such scheme of account numbers as it deems appropriate, provided however, that it shall keep readily available to the Board the information required by the Application form.

 

e)         All applications for racing dates shall contain:

 

1)         A copy of the audited certified public financial statements for the most recently completed fiscal year; and

 

2)         Financial statements for the most recently completed race meeting accompanied by a review by a Certified Public Accountant expressing limited assurance that no significant changes are required in the financial statements.

 

f)         Income and expenses are required by type of operation. If any item not specifically provided for can be identified with a type of operation, such item should be allocated in the income statement. An example of this would be if real estate taxes could be identified for the parking lot, such taxes should be allocated to the parking operation. Items of revenue, cost or expense which are not properly identifiable with any operating department as defined in the system of accounts shall be accounted for in the "Other" column on the Income Statement. Supplementary listings explaining any such material items shall be submitted along with the application.

 

Section 412.40  General Notes to Financial Statements

 

The following notes shall be included in each application filed. This information may be set forth on the face of the application statement, in a supporting schedule or in notes appropriately captioned.

 

a)         Summary of significant accounting policies.

 

1)         Principles of consolidation including accounting for investments in subsidiaries not consolidated. A brief description of the principles followed in consolidating the separate financials. If there has been a change in the entities included or excluded from the previous fiscal year, state the entities and the effect.

 

2)         Depreciation and amortization methods. State the policy followed in computing the provision for depreciation of physical property and leasehold improvements, including the method and rates used.

 

3)         Pension and retirement plan accounting. State a brief description of the essential provisions of the plan and the related accounting and funding policies, including the cost of the plan for the year. Also state whether or not the plan has been submitted to and/or approved by the Internal Revenue Service.

 

4)         Recognition and deferral of income taxes.

 

A)        The following components of income tax expense shall be disclosed in the income statement or a note thereto:

 

i)          taxes currently payable,

 

ii)         tax effects of timing differences, and

 

iii)        tax effects of operating losses and the net deferred investment tax credits.

 

B)        Include a brief description of the nature of such timing differences. Include a brief statement as to the policy for accounting for investment credit.

 

5)         Amortization of intangible assets. Include a brief statement as to the policy and method of amortization.

 

6)         Intercompany profits and losses. Include a brief description as to the amounts and the policy for the accounting for intercompany items.

 

7)         Deferred charges and credits. State the nature and the write-off period of any significant deferred charges.

 

8)         Any other accounting policies that materially affect the determination of financial position, results of operation and changes in financial position.

 

b)         Assets subject to lien. Briefly identify assets mortgaged, pledged or in any other way subject to lien.

 

c)         Defaults. Briefly describe the nature and effect of any defaults of security agreements, indentures and loan agreements.

 

d)         Restrictions on retained earnings. Briefly describe and give the amount of the most restrictive of any such restrictions.

 

e)         Commitments and contingent liabilities. Disclose the amounts and nature of any significant commitments and contingent liabilities.

 

f)         Capital stock. Describe the pertinent facts regarding any stock options, warrants or rights outstanding.

 

g)         Any other footnotes essential to an understanding of the financial statements.

 

Section 412.50  Balance Sheet Accounts

 

100      Cash

 

This account shall include the amount of cash on hand and demand deposits in banks which are immediately available for general business purposes.

 

Typical Items

 

Working funds

Petty cash funds

Undeposited receipts

General checking accounts

Payroll checking accounts

 

101      Cash – Restricted, Outstanding Mutuel Tickets

This account shall include the amount of cash on hand and time and demand deposits in banks which are restricted in use, as required by the Act, for payment of outstanding mutuel tickets.

 

102      Special Funds

Cash on deposit in banks which is not readily available for normal business disbursements because of specific legal withdrawal restrictions (i.e., provisions of loan agreements, etc.) shall be included in this account.

 

110      Temporary Cash Investments

This account shall reflect the book cost of interest-bearing cash deposits and marketable securities acquired for the purpose of temporarily investing cash. Separate sub-accounts shall be maintained as described below for this account:

 

	Accounts	Typical Items
Interest-bearing cash deposits	#111	Savings accounts, time deposits and certificates of deposit
Marketable securities	#112	U.S. Treasury bills and notes State and municipal bonds Corporate bonds, notes and stock Promissory and demand notes

 

120      Receivables

This account shall include amounts due from individuals or organizations, including other licensees, for sales, claims, loans and advances or other debtor obligations, but only to the extent that such amounts are expected to be realized within one year's time.

 

Typical Items

 

Uncollected rents

Overpayment of current year's income tax liability or other obligation

Accrued interest on investments

Uncollected billings or accruals under occupancy agreements or other obligation from other licensees

Substantiated claims against suppliers or public carriers

Claims against NSF checks

Loans and advances due from the licensee's officers and employees, but not expense advances (see Account #130), affiliated companies or others

Obligations in the form of notes receivable

Uncollected proceeds from property sales

Dividends receivable

 

This account shall be maintained in such a manner as to permit segregation and separate reporting of any component item or items in order to facilitate the more accurate identification of the aggregate of receivables where the amount(s) associated with such item(s) make up a majority of the total balance in this account.

 

120.1   Reserve for Doubtful Accounts

 

This account shall include an amount equal to anticipated collection losses and other adjustments or allowances which, in the normal course of events, will reduce the gross charge to the debtor.

 

Accounts which are determined to be uncollectible should be written off against the reserve, and the recoveries of accounts previously written off should be credited to the reserve.

 

The corresponding charge relating to the establishment of this reserve shall be made to the Other Expense Account. (See account #469 in 11 Ill. Adm. Code Section 412.70)

 

130      Prepayments

This account shall include the costs incurred for benefits or services not yet received, but only to the extent that such costs are expected to be realized substantially within the next year.

 

Typical Items

 

Rent

Insurance

Racing License fees

Commissions

Taxes

Inventories of supplies (i.e., office and concession supplies)

Expense advances to employees in the ordinary course of business

 

This account shall be maintained in such a manner as to permit segregation and separate reporting of any component item or items in order to facilitate the more accurate identification of the aggregate of "prepayments" where the amount(s) associated with such item(s) make up a majority of the total balance in this account.

 

140      Other Current Assets

 

This account shall include the amounts of all other current and accrued assets which are expected to be realized within the following year and which are not properly includable in any of the other current asset accounts as defined herein.

 

This account shall be maintained in such a manner as to permit segregation and separate reporting of any component item or items in order to facilitate the more accurate identification of the aggregate of "other current assets" where the amount(s) associated with such item(s) make up a majority of the total balance in this account.

 

150      Investments in Affiliated Companies

 

This account shall include the cost of capital stocks of affiliates acquired by the licensee.

 

In addition, such investments shall be adjusted periodically to reflect the company's proportionate share of subsequent increases or decreases in the underlying book values of such affiliates acquired. (Accounting for investments on the equity method.)

 

The following sub-accounts shall be maintained to provide for the accounting in this area:

 

	Account
Underlying book value of investment	#150.1
Cost in excess of underlying book value at date of investment	#150.2

 

The underlying book value account shall reflect the initial cost of the acquisition as recorded on the affiliates books plus any subsequent adjustments by the association to record its share of any increases or decreases to this initial book value.

 

The cost in excess of underlying book value at date of acquisition account shall reflect that portion of the licensee's total cost of acquisition which exceeded the book value of the affiliate at the initial date of investment.

 

151      Loans and Advances Receivable From Affiliated Company

 

This account shall include the book amount of loans and advances made to affiliated companies but only to the extent that such loans and advances are expected to be realized after one year's time. See Account #120 for recording of loans and advances receivable within one year.

 

160      Property, Plant and Equipment

 

Sub-accounts as described below shall be maintained to reflect the cost of acquisition or construction of the licensee's owned tangible property.

 

Main Facilities – Plant and Track
	Account	Typical Items
Land	#161	All land
Ground improvements	#162	Parking lots, walkways, landscaping, track improvements, etc.
Buildings and improvements	#163	Main plant (grandstand and mutuels building) paddock building, patrol judge towers, etc.
Machinery and equipment	#164	Trucks, tractors, office equipment, heating and cooling equipment, etc.
Furniture and fixtures	#165	Office furniture, etc.
Backstretch Facilities
Buildings and improvements	#166	Stables, barns, tack rooms, training sheds, track kitchen, detention building, recreation building, etc.
Machinery and equipment	#167	The cost of machinery and equipment used exclusively in the backstretch area.
Furniture and fixtures	#168	The cost of furniture and fixtures located in the backstretch area.

 

160.1   Accumulated Depreciation

 

This account shall reflect the accumulated provisions made for depreciation upon the licensee's owned tangible property and shall be the sum of the amounts contained in the sub-accounts shown below. See Exhibit B for reporting of applicable useful lives and method(s) of computing provisions for depreciation.

 

Main Facilities – Plant and Track
	Account
Accumulated depreciation – ground improvements	#162.1
Accumulated depreciation – buildings and improvements	#163.1
Accumulated depreciation – machinery and equipment	#164.1
Accumulated depreciation – furniture and fixtures	#165.1
Backstretch Facilities
Accumulated depreciation – buildings and improvements	#166.1
Accumulated depreciation – machinery and equipment	#167.1
Accumulated depreciation – furniture and fixtures	#168.1

 

170      Leasehold Improvements

 

This account shall include the costs of acquisition or construction of improvements made to facilities leased by the licensee.

 

170.1   Accumulated Amortization of Leasehold Improvements

 

This account shall reflect the accumulated provisions made for amortization of leasehold improvement costs. Such provisions shall be determined on the shorter of the expected useful lives of the improvements or the remaining term of the lease.

 

180      Other Noncurrent Assets

 

This account shall include the amounts of all other noncurrent and accrued assets which are expected to be realized over the period following one year's time and which are not properly includable in any of the other noncurrent asset accounts as defined herein. For example, cash held by a licensee for payment in future years of race purses such as the purse for American National races shall be reflected in this account. Other items properly accounted for in this account shall include deferred charges and other miscellaneous assets which are unusual in nature or the proper final disposition of which is uncertain. Deferred charges is defined as the amount of charges and expenses to be assigned to future periods. Organizations expense is an example. Items in this account are distinguished from similar items classified as prepayments (see Account #130) by the reason that such charges are generally applicable over longer periods of time. Another distinction between a prepayment and a deferred charge is that a prepayment (i.e., insurance) is an amount incurred or paid for services not yet received or the benefit of which has not been fully realized – whereas a deferred charge is a cost of service or goods already received but the income against which such costs are to be matched will not be received until a future period. The write-off of deferred charges is therefore made according to recognition of income from the related projects.

 

200      Accounts Payable

 

This account shall include amounts payable to individuals or organizations, including other licensees and affiliates for receipt of an asset, service, expense incurred or other obligation, but only to the extent that such amounts are expected to be liquidated within one year.

 

Typical Items

 

Unpaid rents

Trade payables to suppliers

Unpaid billings under occupancy agreements or other obligation with other licensees or affiliates

Deposits or loans and advances payable to affiliated companies or others

Unpaid amounts on property purchases

Dividends declared but unpaid

Withholdings from employees for income and social security taxes

 

This account shall be maintained in such a manner as to permit segregation and separate reporting of any component item or items in order to facilitate the more accurate identification of the aggregate of "payables" where the amount(s) associated with such item(s) make up a majority of the total balance in this account.

 

201      Notes Payable

 

This account shall include amounts payable for current maturities of debt obligations for borrowed funds, such as notes or mortgages payable to banks and others, bonds or debentures.

 

202      Special Purse and Reward Fund

 

This account shall reflect the aggregate utilization of monies from the Special Purse and Reward Fund for payment of purses and awards.

 

203      Entry and Nomination Fees

 

This account shall reflect the aggregate utilization of monies from entry and nomination fee escrow accounts for payment of purses.

 

204      Admissions Tax

 

This account shall reflect the amount of state and local taxes paid relating to admissions.

 

205      Parking Tax

 

This account shall reflect the amount of local taxes paid relating to parking.

 

210      Accruals

 

This account shall reflect the total estimated liability for costs that are not immediately payable although the benefit thereon has been received in the current period. Separate sub-accounts shall be maintained as described below for this account:

 

	Account	Typical Items
Taxes	#211	Real estate, personal property, income and other taxes
Interest	#212	Interest liability on borrowed funds
Other	#213	Salaries, vacation and holiday pay, social security

 

If Federal and state income taxes are significantly overpaid, the classification of such overpayment should be as a current asset. (See Account #120.)

 

220      Liability for Outstanding Mutuel Tickets

 

This account shall include the amount of outstanding mutuel tickets for which the licensee has the liability of redemption. (See Account #101.)

 

221      Purse Underpayment Liability

 

This account shall include the amount of the licensee's liability for the underpayment of purses as determined by contract with the horsemen. This account shall also include the licensee's liability for the underpayment of purses provided by the Special Purse and Reward Fund. Any purse overpayment should be recorded as an account receivable in Account #120.

 

230      Loans and Advances Payable to Affiliates

 

This account shall include the face amount of loans and advances made to the licensee by affiliated companies but only to the extent that such loans and advances are expected to be liquidated after one year's time. See Account #200 for recording of loans and advances payable within one year.

 

231      Long-Term Debt

 

This account shall include the face amount of debt obligations for borrowed funds such as notes or mortgages payable to banks and others, bonds or debentures but only to the extent that such obligations are expected to be liquidated in the period following one year's time. See Account #201 for recording of debt obligations payable within one year.

 

240      Deferred Income Taxes

 

This account shall include an amount equal to the tax differences which result from differences in timing or reporting certain transactions for income tax purposes as compared with financial reporting purposes.

 

For example, the application of accelerated depreciation for tax purposes and straight-line depreciation for financial reporting purposes will result in deferred income taxes equal to the tax effect of the difference in the depreciation provision resulting from the use of these two methods.

 

250      Other Long-Term Liabilities

 

This account shall include the amounts of all other noncurrent and accrued liabilities which are expected to be liquidated over the period following one year's time and which are not properly includable in any of the other noncurrent liability accounts as defined herein.

 

This account shall be maintained in such a manner as to permit segregation and separate reporting of any component item or items in order to facilitate the more accurate identification of the aggregate of "other noncurrent liabilities" where the amount(s) associated with such item(s) make up a majority of the total balance in this account.

 

260      Preferred Stock

 

This account shall include the par value of the state value of stock without par value.

 

261      Common Stock

 

This account shall include the par value or the stated value of stock without par value.

 

262      Additional Paid-In Capital

 

This account shall include the excess of the actual cash value of the consideration received on issues of preferred and/or common stock over the par or stated value of such stock.

 

263      Retained Earnings

This account shall include the balance, either debit or credit, of retained earnings arising from earnings.

 

263.1   Equity in Undistributed Earnings (Loss) of Affiliates

 

This account shall include the amount of the periodic adjustments made by the licensee to reflect its proportionate share of increases or decreases in the underlying book value of investments in affiliates.

 

Section 412.60  Income Accounts

 

301      Mutuel Commissions

 

This account shall reflect the monies legally retainable by the licensee under the applicable statute, with the exception that such commissions are to be recorded net of those monies retained due to breaks. This account shall not include applicable state privilege taxes or Special Purse and Reward Fund requirements. When minus pools occur, the payment made by the licensee to meet the public pool requirements shall be recorded as deduction from this account.

 

302      Race Track Improvement Fund

 

This account shall include only those monies deposited with the State Treasurer in the licensee's account pursuant to Section 32(b) of the Act. The state's share of the breakage generated from the racing meet is not to be recorded in this account.

 

303      Admissions

 

This account shall reflect the gross receipts from all admission sources, excluding that portion of receipts applicable to local and state taxes.

 

Typical Items

 

Grandstand and clubhouse gate receipts

Reserved seat and box seat sales and rentals

Club membership receipts

Special guest receipts

 

304      Concession Receipts

 

This account shall include all receipts from sales of food and drink as well as other concessions, such as cigarettes, novelties, field glasses rental, etc., which have occurred at the racing meeting being reported upon. Similar income received from other licensees while they are conducting racing meetings shall be recorded as "other income." (See Account #470 in 11 Ill. Adm. Code Section 412.70)

 

In those instances where the licensee conducting the racing meeting does not operate its own restaurant, bar or concession services, the income recorded in this account shall be equal to any commission or contract income received from the outside operators of such facilities.

 

305      Program Receipts

 

This account shall include all receipts from sales of daily race programs and pencils.

 

When this operation is performed by individuals or organizations other than the licensee conducting the race meet, the income recorded in this account shall be equal to any commission or contract income received from such other individuals or organizations.

 

306      Newspapers and Publication Receipts

 

This account shall include all receipts from sales of newspapers, racing publications (other than daily race programs) and tip sheets.

 

When this operation is performed by individuals or organizations other than the the licensee conducting the racing meet, the income recorded in this account shall be equal to any commission or contract income received from such other individuals or organizations.

 

307      Parking Receipts

 

This account shall include all receipts generated from the operation of parking facilites by the licensee conducting the racing meeting being reported upon. Similar income received from other licensees while they are conducting racing meetings shall be recorded as "other income." (See Account #470 in 11 Ill. Adm. Code Section 412.70)

 

In those instances where the licensee conducting the racing meeting does not operate its own parking facilities, any income received under terms of the agreement with the outside operator of such facilities shall be recorded in this account.

 

Typical Items

 

General parking lot entrance fees

Preferred parking fees

 

Section 412.70  Expense Accounts

 

401      Purses

 

This account shall reflect the aggregate actual purse distributions payable pursuant to the Act during the period of the race meeting. Separate accounts shall be maintained hereunder to identify the amounts of monies used in the payment of purses which were received from sources other than the revenues of the licensee conducting the race meeting. (See Accounts #202 and #203 in 11 Ill. Adm. Code Section 412.50)

 

402      Salaries and Wages – Racing

 

This account shall include the compensation (gross salaries and wages) to employees of the licensee in departmental areas other than concessions, programs, newspapers and publications and parking. In addition, salaries and wages which can be specifically identified as being attributable to repair and maintenance services shall not be recorded in this account. In this latter respect, the compensation of track superintendents, plant directors, etc., shall be allocated to this account unless the time spent by such individuals on supervision and direction of specific repair and maintenance projects can be identified.

 

Typical Items
Mutuel Department:	General Office:
Director	Controller and assistants
Manager	Clerks
Supervisors	Secretaries
Calculators	Receptionist
Sellers	Season retention employees
Cashiers
Runners	Tracks and Grounds:
Clerks	Track Superintendent
	Physical plant Director
Executive Officers:
Association directors	Promotion:
President	Director of publicity and assistants
Vice president	Public relations personnel
Secretary
Treasurer

 

403      Salaries and Wages – Concessions

 

This account shall include the compensation to employees of the licensee for their services in operating restaurant, bar and concession facilities.

 

404      Salaries and Wagers – Programs

 

This account shall include the compensation to employees of the licensee for their services in selling daily race programs.

 

405      Salaries and Wages – Newspapers and Publications

 

This account shall include compensation to employees of the licensee for their services in selling newspapers, racing publications and tip sheets.

 

406      Salaries and Wages – Parking

 

This account shall include compensation to employees of the licensee for their services in operating parking lot facilities.

 

410      Payroll Taxes

 

Separate accounts shall be maintained as described below to reflect the licensee's share of social security and Federal and state unemployment compensation expense. The allocation to such accounts shall be the same as that described for Salaries and Wages.

 

Account

 

#410.1    Payroll Taxes – Racing

#410.2    Payroll Taxes – Concessions

#410.3    Payroll Taxes – Programs

#410.4    Payroll Taxes – Newspapers and Publications

#410.5    Payroll Taxes – Parking

 

415      Employee Benefits

 

Separate accounts shall be maintained as described below to reflect all costs other than salaries and wages and payroll taxes incurred by the licensee on behalf and to the benefit of its employees. The allocation to such accounts shall be the same as that described for Salaries and Wages.

 

Account

 

#415.1     Employee Benefits – Racing

#415.2     Employee Benefits – Concessions

#415.3     Employee Benefits – Programs

#415.4     Employee Benefits – Newspapers and Publications

#415.5     Employee Benefits – Parking

 

Typical Items

 

Workmen's Compensation

Pensions*

Group and life insurance

Medical, hospital, accident, sickness and death benefits or insurance*

 

*     Includes payments to the Electrical Insurance Trustees for mutuel employees' pension and welfare funds.

 

420      Horsemen Welfare, Pension and General Funds

 

This account shall include all costs incurred by the licensee on behalf and for the benefit of horsemen operating at the racing meeting as a result of agreements and understandings with the Horsemen's Benevolent and Protective Association or the Illinois Harness Horsemen's Association.

 

421      Repairs and Maintenance – Racing

 

This account shall include the cost of labor, materials used and expenses incurred in the repair and maintenance of the race track and all the race track and backstretch structures, fixtures and general grounds other than those associated with concession (i.e., restaurant and bar) and parking lot operations. As a general rule, maintenance operations shall be construed as those operations required year-round, as opposed to those operations limited to the period of the racing meeting. For example, the cost of cleaning race track stands is not properly includable in this account as a maintenance expense because the incurrence of such cost is limited to the period of the racing meeting. Therefore, if the cleaning was performed by an employee of the licensee, the related labor cost would be accounted for either as wages of the racing operation or as contractual services of the racing operation if the work was performed by a labor force outside the employ of the licensee. However, if an outside labor force was contracted with to perform a service on a year-round basis, such as the upkeep of the general grounds, the associated cost would be properly accounted for in this account rather than as outside service. (See Account #440.)

 

If total costs of labor, materials used or expenses incurred under certain circumstances require allocation as to amounts applicable to repairs and maintenance, such allocation must be valid and accurate. If the accounting required for such allocation is not reasonable under the circumstances, then the costs in question shall be included in other appropriate accounts herein identified as relating to racing operations.

 

422      Repairs and Maintenance – Concessions

 

This account shall include the cost of labor, materials used and expenses incurred which are specifically identifiable as repairs and maintenance to food- and drink-related facilities (e.g., restaurant, bar and concession structures and fixtures).

 

423      Repairs and Maintenance – Parking

 

This account shall include the cost of labor, materials used and expenses incurred which are specifically identifiable as repairs and maintenance to parking lot facilities.

 

425      Depreciation

 

The accounts described below shall include the amount of depreciation expense which has been incurred during the year as determined by the nature and estimated useful life and salvage value of the property involved. Such accounts shall only be utilized by those licensees who own the land and plant facilities used in the conduct of their racing meetings.

 

Account	Items
#425.1	All race track buildings, structures, equipment, furniture and fixtures except as set forth below
Depreciation – Racing
#425.2	Restaurant, bar and concession equipment, furniture and fixtures
Depreciation – Concessions
#425.3	Parking lot structures and improvements.
Depreciation – Parking

 

430      Amortization of Leasehold Improvements

 

The accounts described below shall include the amount of amortization expense incurred during the year on facilities erected or installed by licensees on leased facilities used in the conduct of their racing meetings. Useful lives used in the determination of such expense shall be the shorter of the expected useful life of the facilities or the remaining term of the lease.

 

Account	Amortization of Leasehold Improvements	Items
#430.1	Racing	All race track buildings, structures, equipment, furniture and fixtures except as set forth below
#430.2	Concessions	Restaurant, bar and concession equipment, furniture and fixtures
#430.3	Parking	Parking lot structures and improvements.

 

435      Track Rental

 

This account shall include all costs incurred under terms of a lease agreement or contract for the use of land or facilities necessary to the conduct of the race meeting being reported upon.  However if, for example, the lessee is required to pay real estate taxes under terms of the lease, such expenses shall be accounted for as "Other Taxes" (see Account #455) rather than as components of this account.

 

436      Equipment Rental

 

This account shall include all equipment rent expenses.

 

Typical Items

 

Totalisator

Closed-circuit monitoring

Starting gate

Electronic timer

Photo-finish

Automatic transcribing equipment

Money counters

Office equipment

 

440      Outside Services

 

Separate accounts shall be maintained by the operating areas described below to reflect the expense incurred by the licensee for services rendered by others.

 

Account		Typical Items
#440.1	Outside Services – Racing	Consulting services Legal and audit Ambulance service Race patrol services Illinois Department of Law Enforcement – Investigative Services Division Burn security services Andy Frain ushers Armored-car services Computer services Tameling and disposal services Radio and TV coverage
#440.2	Outside Services – Concessions	Expenses under lease with outside operators
#440.3	Outside Services – Programs	Expenses under lease with outside operators
#440.4	Outside Services – Newspapers and Publications	Expenses under lease with outside operators
#440.5	Outside Services – Parking	Expenses under lease with outside operators

 

445      Costs of Items Sold

 

Accounts shall be maintained for the operating areas described below to reflect the costs of items sold by the licensee during the operation of its racing meeting.

 

Account		Typical Items
#445.1	Cost of Concessions Sold	Cost of food, drink, cigarettes and novelties
#445.2	Cost of Programs Sold	Cost of programs
#445.3	Cost of Newspapers and Publications Sold	Cost of newspapers, racing publications and tip sheets

 

450      Licenses

 

Separate accounts shall be maintained by the operating areas described below to reflect the license fee expense incurred.

 

Account		Items
#450.1	Licenses – Racing	License fees required by statute to accompany the application for racing dates and for racing days granted.
#450.2	Concessions	License fees (if any) paid by the licensee for the privilege of operating restaurant and bar facilities

 

455      Other Taxes

 

Separate accounts shall be maintained by the operating areas described below to reflect all tax expenses which were incurred by the licensee in addition to payroll and income tax expenses.

 

Account		Items
#455.1	Other Taxes – Racing	Real estate, personal property and other advalorem taxes.
#455.2	Other Taxes – Concessions	Sales taxes on sales of food and drink.

 

460      Utilities

 

This account shall include the cost incurred by the comsumption/utilization of heat, light, power and water as well as telephone and telegraph costs.

 

461      Insurance

 

This account shall include all insurance expenses incurred by the licensee in addition to those insurance expenses accounted for a "Employee Benefits."

 

462      Advertising

 

This account shall include all advertising and publicity costs incurred in addition to those accounted for as "Salaries and Wages" or "Contractual Services."

 

Typical Items

 

Newspaper, television, radio and magazine costs

Photography and artwork

Public relations fees

Pass and special promotions

 

463      Contributions

 

This account shall include the amount of all contributions or donations made by the licensee for charitable, social or community welfare purposes.

 

464      Subscriptions and Dues

 

This account shall be used to account for all disbursements made in payment of membership dues.

 

Typical Items

 

Harness Tracks of America

Racing Association of Illinois

 

465      Breeders Awards and Trophies

 

This account shall reflect the total of all awards and trophies distributed by the licensee to breeders of horses.

 

466      Travel and Entertainment

 

This account shall include all expenses incurred by the licensee during the fiscal reporting period for transportation of its officers and employees and for the entertainment of individuals in connection with the business of making application for conducting and operating the racing meeting.

 

467      Printing and Stationery

 

This account shall include the cost and expense incurred for publications and pamphlets used by the licensee in it operations.

 

Typical Items

 

Condition books

Notices to horsemen

 

468      General Supplies

 

This account shall reflect the expense incurred for those supplies normally consumed in the administration and operation of the licensee's operations.

 

Account		Typical Item
#468.1	Racing	Office Supplies Clean Supplies Gas, oil, grease, etc. Badges and tickets Postage
#468.2	Concessions	Miscellaneous supplies (e.g., ice, laundry, etc.)

 

469      Other

 

This account shall include all other costs of labor, materials supplied or expenses incurred in connection with the operation of the racing meeting which are not properly accounted for elsewhere in the accounts.

 

Account		Typical Items
#469.1	Racing	Uncollectible checks Cash over and short Jockey Guild assessment Bad debts Amortization of organization expense

 

470      Other Income

 

This account shall include those revenues which by their nature are not identifiable as being the direct result or benefit of the business of conducting a racing meeting.

 

Typical Items

 

Rental income –

Race Track

Equipment

Stable areas

Outdoor billboards

Stalls

Interest income –

On advances made to affiliated companies

Investments

Gain on sales –

Equipment

Marketable securities

Insurance recoveries

Dividends

Equity in undistributed earnings of subsidiaries

Refunds

 

476      Other Expense

 

This account shall include those costs and expenses which by their nature are not identifiable as being directly related to the operation of racing meetings.

 

Typical Items

 

Interest charges –

Parent company

Affiliated companies

Loss on sales –

Equipment

Marketable securities

Trustees' fees and expenses

 

480

and

481      Federal and State Income Taxes

 

Accounts shall be maintained for the operating areas listed below to reflect the amount of Federal or state income taxes necessary to meet the actual liability for such taxes incurred as a result of operations in these specific areas for the period covered by the income statement. Such taxes should be computed on a basis from which the income and deductions originated.

 

Account
#480.1	Federal Income Taxes – Racing
#480.2	Federal Income Taxes – Concessions
#480.3	Federal Income Taxes – Programs
#480.4	Federal Income Taxes – Newspapers and Publications
#480.5	Federal Income Taxes – Parking
#481.1	State Income Taxes – Racing
#481.2	State Income Taxes – Concessions
#481.3	State Income Taxes – Programs
#481.4	State Income Taxes – Newspapers and Publications
#481.5	State Income Taxes – Parking

 

482      Provision for Deferred Income Taxes

 

Accounts shall be maintained for the operating areas listed below to reflect an amount equal to that by which income taxes payable on book income for the current year are decreased because of the current deduction for income tax purposes of accelerated depreciation, amortization and other timing differences. Reference should be made to the instructions for Account #240 in 11 Ill. Adm. Code Section 412.50

 

Account
#482.1	Provisions for Deferred Federal and State Income Taxes – Racing
#482.2	Provisions for Deferred Federal and State Income Taxes – Concessions
#482.3	Provisions for Deferred Federal and State Income Taxes – Programs
#482.4	Provisions for Deferred Federal and State Income Taxes – Newspaper and Publications
#482.5	Provisions for Deferred Federal and State Income Taxes –Parking

 

483      Income Taxes Deferred in Prior Years

 

Accounts shall be maintained for the operating areas listed below to reflect an amount equal to that by which income taxes payable for the current year are attributable to a deferral of taxes on income in a prior year. (See Account #240 in 11 Ill. Adm. Code Section 412.50)

 

Account
#483.1	Federal and State Income Taxes Deferred in Prior Years – Racing
#483.2	Federal and State Income Taxes Deferred in Prior Years – Concessions
#483.3	Federal and State Income Taxes Deferred in Prior Years – Programs
#483.4	Federal and State Income Taxes Deferred in Prior Years – Newspaper and Publications
#483.5	Federal and State Income Taxes Deferred in Prior Years

 

485      Extraordinary Gains and Losses

 

This account shall include those material gains and losses associated with events and transactions which by their underlying nature are of a character significantly different from the normal business activities of the licensee. Such events and transactions are, by definition, non-recurring factors not to be considered in the evaluation of normal business operations.

 

Typical Items

 

Sale of significant segment of the business

Sale of an investment not acquired for resale

Significant uninsured losses due to fires, floods, etc.

Significant lawsuit losses, etc.