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.