N.Y. Comp. Codes R. & Regs. tit. 16, § 197.23 – Operating property retired.

(a) Except as otherwise provided in paragraph (2) of subdivision (b), and subdivision (c) hereunder, the book cost of depreciable operating property retired (see § 196.1, subd. [a][35]) shall be charged in its entirety to account 261, Depreciation Reserves, together with the cost of removal. To that account shall be credited salvage value and amounts recovered as insurance or otherwise, including amounts provided in account 264, Insurance Reserve.
(b) For the purpose of avoiding undue refinement in accounting for the replacement of small items of property, depreciable Operating Property—Electric and Operating Property—General shall be grouped into (1) units of property, and (2) minor items, and the accounting for retirements and replacements of each group shall be as follows:
1. (1) Units of property. Not later than six months following the date when it becomes subject to this system of accounts, each utility shall file with the commission a statement subscribed by the responsible municipal official or other duly authorized representative showing for each account or subdivision thereof in Operating Property—Electric (and Operating Property—General) a list of the types and quantities of property which are accounted for as units of property. Any revision thereof shall be filed in like manner. The book cost of any unit of property retired shall be credited to the appropriate operating property account and charged to account 261, Depreciation Reserves, whether or not replaced. The cost of property installed in place of property retired shall be charged to the appropriate operating property account.
2. (2) Minor items.
  1. (i) This group includes any part or element which is not designated as a unit of property. The book cost of any minor item of property retired and not replaced shall be credited to the operating property account wherein included and charged to account 261, Depreciation Reserves, except that, if the book cost of a minor item of property has been or will be accounted for by its inclusion in the unit of property of which it is a part when such unit is retired, no separate credit to the operating property account is required when such minor item is retired.
  2. (ii) If minor items of property are retired and replaced (apart from the unit of property of which they form a part or with which they are associated), no entry shall be made in the operating property account or in account 261, Depreciation Reserves. The cost of the replacement shall be charged to the account appropriate for the cost of repairs to the property, except that, if the replacement effects a substantial betterment (the primary aim of which is to make the property affected more useful, more efficient, or of greater capacity), there shall be charged to the appropriate operating property account the access cost of the replacement over the estimated cost at current prices of replacing without betterment the minor items retired.
    (c) Determination of book cost.
    The book cost of operating property retired shall be the amount at which such property is included in the operating property accounts including all items set forth in paragraphs (1) to (10) of subdivision (e) of section 197.21. Such costs shall be determined from the utility's records when this can be done, as in the case of land, structures, boilers, engines, generating station and substation equipment, transportation, office, and other equipment, and other items of operating property for which individual cost records are available. When the actual book cost can not be determined from the records, it shall be estimated. When it is impracticable to determine the book cost of each item due to the relatively large number or small cost thereof, the average book cost of the items, with due allowance for differences in size, character or year of installation, shall be used as the book cost of the items retired, except that utilities in Classes C and D need not take account of year of installation. The continuing property record, when completed, shall be used in accounting for retirements.
(d) The accounting for the retirement of items included in account 302, Franchises and Consents, account 303, Miscellaneous Intangible Property, and intangible elements with limited terms included in account 311, Land, shall be as provided in the texts of account 262, Amortization Reserves, and account 790, Amortization of Intangible Property.
(e) When operating property constituting an operating unit or system is sold, the book cost of the property shall be credited to the appropriate operating property accounts. The amounts (estimated if not known) carried with respect thereto in the depreciation and amortization reserve accounts and account 263, Contributions for Extensions, shall be cleared for such reserves. Unless otherwise ordered by the commission, the difference, if any, between (1) the net amount of such debit and credit items, and (2) the consideration received for the property, shall be included, if a debit, in account 514, Miscellaneous Debits to Surplus, or, if a credit, in account 502, Miscellaneous Credits to Surplus.
(f) If the cause of retirement of depreciable Operating Property—Electric or Operating Property—General is one for which provision has not been made in the depreciation reserves and the loss is not covered by insurance, or if the retirement could not reasonably have been foreseen and provided for, the utility, upon order of the commission, may credit account 261, Depreciation Reserves, and charge account 143, Suspense to be Amortized, with the unprovided for loss in service value and distribute it through charges to account 789, Deferred Retirement Losses, over such period as the commission may order.