20141008IRS Accounting Method Change.pdf

ROCKY MOUNTAIN
POWER RICEl\'/i: i-]
?Bl\ OcT -3 [H 9: 22 201 South Main, Suite 2300
Salt Lake City, Utah 84111
October 8,2014
YIA OVERNIGHT DELIWRY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702
RE: Change in Method of Accounting for Income Tax Purposes
Dear Ms. Jewell:
Rocky Mountain Power, a division of PacifiCorp (PacifiCorp or Company), submits this letter to
notifr the Idaho Public Utilities Commission (Commission) of its application for an automatic
accounting method change (Form 31 15) with the Internal Revenue Service (IRS) on December
19,2013. Neither the IRS nor PacifiCorp require that the Commission take any action. The
automatic accounting change was made final with the filing of Form 3l l5 with the Berkshire
Hathaway lnc.2013 federal consolidated tax return (which includes the PacifiCorp federal tax
retum) on September 12,2014. This change is applicable for income tax purposes only and does
not impact the methods of accounting used for FERC or U.S. GAAP financial reporting
purposes.
The application for accounting method change was to make a general asset account election for
MACRS property used in the PacifiCorp's Electric Generation, Transmission and Distribution
trade or business which was placed in service in taxable years beginning before January 1,2012,
with a net tax basis as of December 31, 2012. The request gives PacifiCorp permission to group
certain generation, transmission and distribution assets into various general asset accounts by
vintage (placed in service date) and tax class. PacifiCorp's tax class is a methodology of
classifuing assets into the appropriate ( 1 ) applicable depreciation method , (2) the applicable
recovery period, and (3) the applicable convention per Intemal Revenue Code Sections 168 and
t67(a).
As noted above, in making the automatic accounting method change, PacifiCorp is required to
submit, within 30 calendar days of filing the federal income tax return, a copy of the completed
application to any regulatory body having jurisdiction over the public utility property subject to
the application. In compliance with this term, a copy of the Form 3l 15 is enclosed. No further
action is requested or required on your part.
Rocky Mountain Power respectfully requests that all formal correspondence and requests for
additional information regarding this filing be addressed to the following:
datarequest@f acifi corp. com
Ted.weston@fracifi corp. com
By E-mail (preferred):
l
Idaho Public Utilities Commission
Page2
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomatr, Suite 2000
Portland, OR 97232
Informal inquiries may be directed to Dave Taylor at [phone].
Sincerely,
P. Lk^a'b^, I kJ
Vice President, Regulation and Government Affairs
Enclosures
Jeffiey K. Larsen
,",r 3115
(Rw. Dcccmber2009)
Daputmcot ol th. Irer*ry
fllndivldual
@ Corporation
I Conlrolled foreign corporation
(Sec.954
E 10/s0 corporation (Sec. 904(dX2XED
EI Qualifled personal servlce
corporatlon (Sec. aa8(d)(2)
Appllcatlon for Ghange ln Accountlng Method
I Cooperalive (Sec. 1381)
[] Partnershlp
ff S corporatlon
I lnsurance co. (Sec. 816(aD
I lnsurance co. (Sec.831)
El Other (specify) >
OMBNo. 1545-0152
Namc of lilor (name of pa'oni corporauon ll a ln!kucllons)
Berkshlre Hathaway lnc.47-0813844
Pdnclpal bu3in€ss actlvlty codo nu.nb6r
55112
,oom or suito no, ll a box, soo lho lnstrncthB.Tax yea ofohango bcglns (MM/DD/Y\ fYl 01t0112013
I'140 Klewlt Plaza Torycarofchange.ndr(M]ilDD ry\rY) 1213112019
or !own.prflon (soo lnrtn otloflr)
NE 68131 Jonathan D. Hale
numb!(!) (!60 ln.truouoncl Contacl por!on'! tcl.phono number
93-0246090 813.5901
lI the
of Atiorney
Check the approprlate box to lndlcate the type
of accountlng method change bclng requeeted.
(see instructlons)
I Deprecialion or Amorlizallon
El Financlal Products and/or FlnanchlActivllles of
Financlal lnslitutlons
@ Other (specify) > Late General Aseet Account
Electlon
Exempt Enler Code sectlon )
Cautlon. To be ellglble for approvalol tha requested change ln melhod ol aeeaunllng,lhe lupayer must provlde alllnlornatlon lhat ls rclevant to tho tapayer
ot to tha lugayer's rcqucsted change in method ol accountlng. lhls lncludes all lnfwmation regueslod on this Form 3115 (lncludlng its instructlons), as
well as any oth* lntormatlon tiat Is not specilicafry requ*ted,
The taxpayer must attach alt appllcable eupplemental stalements requeeted throughout thls form.
Enter the appllcable designated automatlc melhod change number lor lhe requestod automatic change. Enter
only one designaled automalic accounting method change numb€r, excspt as provided lor in guldance published by lhe
lRS. lf the requested change has no deslgnated automatlc accounting method change number, check 'Other,' and provide
both a descilption of the change and cltEtlon of the IRS guidance provlding the automatic change. See instrucllons.
> (a) Change No. 180 @) Other E Descrlption >
2
Note.
Do any o, tho scope llmitations described ln section 4.02 ol Rev. Proc. 2008-52 cause automatlc consenl to be
unavallableforthEappticant.srequestedchange?lf.Yes,,attachanexplanalion..
Part ll below and ttpn Part lV, and also SclpdulesA through E ol thisform Ql appltcable).
3 Old or wlll the applicant cease lo €ngage ln the trade or buslnsss to which lhe requested change relates, or
termlnate its exlstence, in the tax year of changa (see lnstructlons)? .
lf "Yes," the applicant ls not eligible to make the change under automalic change r€quost procedures.
Ooes the appllcant (or any prosent or former consolidated group in whlch the applicant was a member during the
appllcable ta,r year(s) have any Federal lncome to< return(s) under examinallon (see inskuctlons)?lf t'No," go to llne 5.
ls the method of accountlng the appllcant ls requestlng to change an lssue (with respect to alther the appllcant or
any present or former consolldated group ln which the appllcant was a member durlng the appllcable tax year(s)
elther (0 under considerallon or
6ee
lntormauon o, whlch proparor h83 srry knowledgo. -
Fller Preparer (other than filer/applloantl
Slgmttlo or lndlvldual pr.prrlng th. appllc.Uon rnd dato
Itl.mc ot lndMdu.l propErlng thc rppllcatlon @rlnt oi t!,p.l
Nrm. ot ffm pr.parlng the applloauon
4a
For Prlvacy Act and Pap€rwork Reducllon Acl Nollce, scc the lnatructlone.Cat. No. ts2&E rorm 31 15 Fov. 12-alo8)
Form 3115 (Rev. 12-2009)
ls the method of accounting the applicant is requesting to change an issue pending (with respect to either the
applicant or any present or former consolidated group in which the applicant was a member during the applicable
tax yea(s)) for any tax year under examination (see instructions)? See Attached Statement for Q4(c) - Q6
ls the request to change the method of accounting being filed under the procedures requiring that the operating
division director consent to the filing of the request (see instructions)? .
lf "Yes," attach the consent statement from the director.
ls the request to change the method of accounting being filed under the 90-day or 120-day window period?
lf "Yes," check the box for the applicable window period and attach the required statement (see instructions).
E so oay E t zO Oay: Date examination ended )
f lf you answered "Yes" to line 4a, enter the name and telephone number of the examining agent and the tax
year(s) under examination.
Name ) Steve Davis Telephone number > [phone] Tax year(s) > 2010-2011
Has a copy of this Form 31 15 been provided to the examining agent identified on line 4f?
Does the applicant (or any present or former consolidated group in which the applicant was a member during the
applicable tax year(s)) have any Federal income tax return(s) before Appeals and/or a Federal court?
lf "Yes," enter the name of the (check the box) [ Appeals officer and/or ! counsel for the government,
telephone number, and the tax yea(s) before Appeals and/or a Federal court.
Name ) See Attached Statement TelephOne number > see Attached statement Tax yea(S) > see Attached
Has a copy of this Form 31 15 been provided to the Appeals officer and/or counsel for the government identified
on line 5a?
ls the method of accounting the applicant is requesting to change an issue under consideration by Appeals and/or
a Federal court (for either the applicant or any present or former consolidated group in which the applicant was a
member for the tax year(s) the applicant was a member) (see instructions)?
lf "Yes," attach an explanation.
lf the applicant answered "Yes" to line 4a and/or 5a with respect to any present or former consolidated group,
attach a statement that provides each parent corporation's (a) name, (b) identification number, (c) address,
and (d) tax year(s) during which the applicant was a member that is under examination, before an Appeals office,
andlor before a Federal court.
lf, for federal income tax purposes, the applicant is either an entity (including a limited liability company) treated as
a partnership or an S corporation, is it requesting a change from a method of accounting that is an issue under
consideration in an examination, before Appeals, or before a Federal court, with respect to a Federal income tax
return of a partner, member, or shareholder of that entity? .
lf "Yes," the applicant is not eligible to make the change.
Does the applicable revenue procedure (advance consent or automatic consent) state that the applicant does not
receive audit protection for the requested change (see instructions)?
lf "Yes," attach an explanation.
Has the applicant, its predecessor, or a related party requested or made (under either an automatic change
procedure or a procedure requiring advance consent) a change in method of accounting within the past 5 years
(including the year of the requested change)?
lf "Yes," for each trade or business, attach a description of each requested change in method of accounting
(including the tax year of change) and state whether the applicant received consent. See Attached Statement
lf any application was withdrawn, not perfected, or denied, or if a Consent Agreement granting a change was not
signed and returned to the lRS, or the change was not made or not made in the requested year of change, attach
an explanation.See Attached Statement
Does the applicant, its predecessor, or a related party currently have pending any request (including any
concurrently filed request) for a private letter ruling, change in method of accounting, or technical advice? .
lf "Yes," for each request attach a statement providing the name(s) of the taxpayer, identification number(s), the
type of request (private letter ruling, change in method of accounting, or technical advice), and the specific issue(s)
s
5a
8a
b
9a
10a
in the request(s).
11 ls the applicant requesting to change its overal! method of accounting?
lf "Yes," check the appropriate boxes below to indicate the applicant's
accounting. Also, complete Schedule A on page 4 of this form.
See Attached Statement
present and proposed methods of
Present method: E Casfr
Proposed method: E Casn
E Accrual
E Accrual
E HyOriO (attach description)
n UyOriO (attach description)
Alt (con
Form 31 15 1neu. 12-2oos)
Form 3115 (Rev. 12-2009)
12 lf the applicant is either (i) not changing its overall method of accounting, or (ii) is changing its overall method of
accounting and also changing to a special method of accounting for one or more items, attach a detailed and
complete description for each of the following:
The item(s) being changed. See Attached Statement
The applicant's present method for the item(s) being changed. See Attached Statement
The applicant's proposed method for the item(s) being changed. See Attached Statement
The applicant's present overall method of accounting (cash, accrual, or hybrid). See Attached Statement
13 Attach a detailed and complete description of the applicant's trade(s) or business(es), and the principal business
activity code for each. lf the applicant has more than one trade or business as defined in Regulations section
1.446-1(d), describe: whether each trade or business is accounted for separately; the goods and services
provided by each trade or business and any other types of activities engaged in that generate gross income; the
overall method of accounting for each trade or business; and which trade or business is requesting to change its
separate application.See Attached Statement
for the applicant's books and records and financial statements?
For insurance companies, see the instructions
lf "No," attach an explanation.See Attached Statement
15a Has the applicant engaged, or will it engage, in a transaction to which section 381 (a) applies (e.9., a
reorganization, merger, or liquidation) during the proposed tax year of change determined without regard to any
potential closing of the year under section 381(b)(1)?
b lf "Yes," for the items of income and expense that are the subject of this application, attach a statement identifying
the methods of accounting used by the parties to the section 381(a) transaction immediately before the date of
distribution or transfer and the method(s) that would be required by section 381(c)(a) or (c)(5) absent consent to
the change(s) requested in this application.
16 Does the applicant request a conference with the IRS National Office if the IRS proposes an adverse response?
17 lf the applicant is changing to either the overall cash method, an overall accrual method, or is changing its method
of accounting for any property subject to section 2634, any long-term contract subject to section 460, or
inventories subject to section 474, enler the applicant's gross receipts for the 3 tax years preceding the tax year of
change. N/A
a
b
c
d
Yes No
Yes No
accounting method as part of this application or a
14 Will the proposed method of accounting be used
1sl preceding
year ended: mo.
2nd preceding
year ended: mo.
3rd preceding
year ended: mo.
19
18 ls the applicant's requested change described in any revenue procedure, revenue ruling, notice, regulation, or
other published guidance as an automatic change request?
lf "Yes," attach an explanation describing why the applicant is submitting its request under advance consent
request procedures.
Attach a full explanation of the legal basis supporting the proposed method for the item being changed. lnclude a
detailed and complete description of the facts that explains how the law specifically applies to the applicant's
situation and that demonstrates that the applicant is authorized to use the proposed method. lnclude all authority
(statutes, regulations, published rulings, court cases, etc.) supporting the proposed method. Also, include either a
discussion of the contrary authorities or a statement that no contrary authority exists.
Attach a copy of all documents related to the proposed change (see instructions).
Attach a statement of the applicant's reasons for the proposed change.
lf the applicant is a member of a consolidated group for the year of change, do all other members of the
consolidated group use the proposed method of accounting for the item being changed?
lf "No," attach an explanation.
Entertheamountofuserfeeattachedtothisapplication(seeinstructions).}$-
lf the applicant qualifies for a reduced user fee, attach the information or certification
Does the applicable revenue procedure, revenue ruling, notice, regulation, or other published guidance require the applicant to
implement the requested change in method of accounting on a cut-off basis rather than a section 481(a) adjustment? .
lf "Yes," do not complete lines 25, 26, and 27 below.
Enter the section 481(a) adjustment. lndicate whether the adjustment is an increase (+) or a decrease (-) in
income. > $ O Attach a summary of the computation and an explanation of the methodology
used to determine the section 481 (a) adjustment. lf it is based on more than one component, show the
computation for each component. lf more than one applicant is applying for the method change on the same
application, attach a list of the name, identification number, principal business activity code (see instructions), and
20
21
22
23a
b
rorm 31 15 1ner. 12-2oos\
25
the amount of 481(a) ad attributable to each
Form 3115 (Rev. 12-2009)
26 lf the section 481(a) adjustment is an increase to income of less than $25,000, does the applicant elect to take the
entire amount of the adjustment into account in the year of change?
27 ls any part of the section 481(a) adjustment attributable to transactions between members of an affiliated group, a
consolidated group, a controlled group, or other related parties?
lf "Yes."
Enter the following amounts as of the close of the tax year preceding the year of change. lf none, state "None." Also, attach a
statement providing a breakdown of the amounts entered on lines 1a through 19.
lncome accrued but not received (such as accounts receivable)
lncome received or reported before it was earned (such as advanced payments). Attach a description of
the income and the legal basis for the proposed method
Expenses accrued but not paid (such as accounts payable)
Prepaid expenses previously deducted
Supplies on hand previously deducted and/or not previously reported .
lnventory on hand previously deducted and/or not previously reported. Complete Schedule D, Part ll
Other amounts (specify). Attach a description of the item and the legal basis for its inclusion in the
calculation of the section 481(a) adjustment. >
Net section 481(a) adjustment (Combine lines 1a-19.) lndicate whether the adjustment is an increase (+)
or decrease (-) in income. Also enter the net amount of this section 481(a) adjustment amount on Part lV,
line 25.
2 ls the applicant also requesting the recurring item exception under section 461(hX3)? . E yes E tto
3 Attach copies of the profit and loss statement (Schedule F (Form '1040) for farmers) and the balance sheet, if applicable, as of
the close of the tax year preceding the year of change. Also attach a statement specifying the accounting method used when
preparing the balance sheet. lf books of account are not kept, attach a copy of the business schedules submitted with the
Federal income tax return or other return (e.9., tax-exempt organization returns) for that period. lf the amounts in Part l, lines
1a through 19, do not agree with those shown on both the profit and loss statement and the balance sheet, attach a statement
explaining the differences.
Applicants requesting a change to the cash method must attach the following information:
1 A description of inventory items (items whose production, purchase, or sale is an income-producing factor) and materials and
supplies used in carrying out the business.2 An explanation as to whether the applicant is required to use the accrual method under any section of the Code or regulations.
Schedule B-Change to the Deferral Method for Advance Payments (see instructions)
1 lf the applicant is requesting to change to the Deferral Method for advance payments described in section 5.02 of Rev. Proc.
2OO4-34,2OO4-1 C.B. 991, attach the following information:
a A statement explaining how the advance payments meet the definition in section 4.01 of Rev. Proc. 2004-34.
b lf the applicant is filing under the automatic change procedures of Rev. Proc. 2008-52, the information required by section
8.02(3Xa)-(c) of Rev. Proc. 2004-34.
c lf the applicant is f iling under the advance consent provisions of Rev. Proc. 97 -27 , the information required by section
8.03(2Xa)-(0 of Rev. Proc. 2OO4-34.
2 lf the applicant is requesting to change to the deferral method for advance payments described in Regulations section
1 .451 -5(b)0 Xii), attach the following.a A statement explaining how the advance payments meet the definition in Regulations section 1.451-5(aX1).
b A statement explaining what portions of the advance payments, if any, are attributable to services, whether such services are
integral to the provisions of goods or items, and whether any portions of the advance payments that are attributable to
non-integral services are less than five percent of the total contract prices. See Regulations sections 1.451-5(a)(2)(i) and (3).
c A statement explaining that the advance payments will be included in income no later than when included in gross receipts for
purposes of the applicant's financial reports. See Regulations section 1 .451-5(b)(1XiD.d A statement explaining whether the inventoriable goods exception of Regulations section 1 .a51-5(c) applies and if so, when
substantial advance payments will be received under the contracts, and how the exception will limit the deferral of income.
rorm 31 15 6er. 12-2OOs)
a
b
c
d
e
t
s
h
Schedule A-Change in Overall Method of Accounting (lf Schedule A applies, Part I below must be completed.)
Form 3115 (Rev. 12-2009)eage 5
Schedule C-Ghanges Within the LIFO lnventory Method (see instructions)
General LIFO lnformation
Complete this section if the requested change involves changes within the LIFO inventory method. Also, attach a copy of all
Forms 970, Application To Use LIFO lnventory Method, filed to adopt or expand the use of the LIFO method.
Attach a description of the applicant's present and proposed LIFO methods and submethods for each of the following
items:
Valuing inventory (e.9., unit method or dollar-value method).
Pooling (e.g., by line or type or class of goods, natural business unit, multiple pools, raw material content, simplified dollar-
value method, inventory price index computation (lPlC) pools, vehicle-pool method, etc.).
Pricing dollar-value pools (e.9., double-extension, index, link-chain, link-chain index, lPlC method, etc.).
Determining the current-year cost of goods in the ending inventory (i.e., most recent acquisitions, earliest acquisitions during
the current year, average cost of current-year acquisitions, or other permitted method).
lf any present method or submethod used by the applicant is not the same as indicated on Form(s) 970 filed to adopt or
expand the use of the method, attach an explanation.
lf the proposed change is not requested for all the LIFO inventory, attach a statement specifying the inventory to which the
change is and is not applicable.
lf the proposed change is not requested for all of the LIFO pools, attach a statement specifying the LIFO pool(s) to which the
change is applicable.
Attach a statement addressing whether the applicant values any of its LIFO inventory on a method other than cost. For
example, if the applicant values some of its LIFO inventory at retail and the remainder at cost, identify which inventory items
are valued under each method.
lf changing to the lPlC method, attach a completed Form 970.
a
b
c
d
!nventories
lf the applicant is proposing to change its pooling method or the number of pools, attach a description of the contents of, and
state the base year for, each dollar-value pool the applicant presently uses and proposes to use.
lf the applicant is proposing to use natural business unit (NBU) pools or requesting to change the number of NBU pools,
attach the following information (to the extent not already provided) in sufficient detail to show that each proposed NBU was
determined under Regulations section 1.472-8(bX1) and (2):
A description of the types of products produced by the applicant. lf possible, attach a brochure.
A description of the types of processes and raw materials used to produce the products in each proposed pool.
6 lf all of the products to be included in the proposed NBU pool(s) are not produced at one facility, state the reasons for the
separate facilities, the location of each facility, and a description of the products each facility produces.
d A description of the natural business divisions adopted by the taxpayer. State whether separate cost centers are maintained
and if separate profit and loss statements are prepared.
e A statement addressing whether the applicant has inventories of items purchased and held for resale that are not further
processed by the applicant, including whether such items, if any, will be included in any proposed NBU pool.
f A statement addressing whether all items including raw materials, goods-in-process, and finished goods entering into the
entire inventory investment for each proposed NBU pool are presently valued under the LIFO method. Describe any items that
are not presently valued under the LIFO method that are to be included in each proposed pool.
g A statement addressing whether, within the proposed NBU pool(s), there are items both sold to unrelated parties and
transferred to a different unit of the applicant to be used as a component part of another product prior to final processing.
3 lf the applicant is engaged in manufacturing and is proposing to use the multiple pooling method or raw material content
pools, attach information to show that each proposed pool will consist of a group of items that are substantially similar. See
Regulations section 1.472-8(bX3).
4 lf the applicant is engaged in the wholesaling or retailing of goods and is requesting to change the number of pools used,
attach information to show that each of the proposed pools is based on customary business classifications of the applicant's
a
b
Form 3115 (Rev. 12-2009)
ar(;lltuult rJ-\rrlallgl
Section 263A Assets
Treatment of Long-Term or Other
instructions)
in Reoortinq lncome From Lonq-T lll on oaoes 7 and 8
1 To the extent not already provided, attach a description of the applicant's present and proposed methods for reporting income
and expenses from long-term contracts. Also, attach a representative actual contract (without any deletion) for the requested
change. lf the applicant is a construction contractor, attach a detailed description of its construction activities.
Are the applicant's contracts long-term contracts as defined in section 460(fX1) (see instructions)? n Yes
lf "Yes," do all the contracts qualify for the exception under section 460(e) (see instructions)? E Yes
lf line 2b is "No," attach an explanation.
lf line 2b is "Yes," is the applicant requesting to use the percentage-of-completion method using cost-to-
cost under Regulations section 1.460-4(b)?E Yes E tto
d lf line 2c is "No," is the applicant requesting to use the exempt-contract percentage-of-completion
method under Regulations section 1.460-4(c)(21? . E Yes E tto
lf line 2d is "Yes," attach an explanation of what cost comparison the applicant will use to determine a
contract's completion factor.
lf line 2d is "No," attach an explanation of what method the applicant is using and the authority for its use.
3a Does the applicant have long-term manufacturing contracts as defined in section 460(f)(2)? . ! yes E tto
b lf "Yes," attach an explanation of the applicant's present and proposed method(s) of accounting for long-
term manufacturing contracts.
c Attach a description of the applicant's manufacturing activities, including any required installation of manufactured goods.
4 To determine a contract's completion factor using the percentage-of-completion method:a Will the applicant use the cost-to-cost method in Regulations section 1.460-4(b)? . f] Ves E tto
b lf line 4a is "No," is the applicant electing the simplified cost-to-cost method (see section 460(bX3) and
Regulations section 1.460-5(c))? n Yes n no
5 Attach a statement indicating whether any of the applicant's contracts are either cost-plus long-term
contracts or Federal lonq-term contracts.
I Attach a description of the inventory goods being changed.2 Attach a description of the inventory goods (if any) NOT being changed.
3a ls the applicant subject to section 263A? lf "No," go to line 4a E yes Etto
b ls the applicant's present inventory valuation method in compliance with section 263A (see instructions)?
lf "No," attach a detailed explanation .
Check the appropriate boxes below.
ldentification methods:
Specific identification .
FIFO
LIFO
Other (attach explanation)
Valuation methods:
Cost
Cost or market, whichever is lower
Retail cost
Retail, lower of cost or market .
Other (attach explanation)
Enter the value at the end of the tax year preceding the year of change
lnventory Not
Being Changed
5 lf the applicant is changing from the LIFO inventory method to a non-LIFO method, attach the following information (see
instructions).
Copies of Form(s) 970 filed to adopt or expand the use of the method.
Only for applacants requesting advance consent. A statement describing whether the applicant is changing to the method
required by Regulations section 1.472-6(a) or (b), or whether the applicant is proposing a different method.
Only for applicants requesting an automatic change. The statement required by section 22.01(5) of the Appendix of Rev.
Proc. 2008-52 (or its successor).
E tto
Eruo
2a
b
4a
Present method
a
b
rorm 3115 (Rev. 12-2009)
Form 3115 (Rev. 12-2009)
plete
to section 263A or long-term contracts as described in section 460 (see instructions)).
Section A-Allocation and Capitalization Methods
Attach a description (including sample computations) of the present and proposed method(s) the applicant uses to capitalize direct
and indirect costs properly allocable to real or tangible personal property produced and property acquired for resale, or to allocate
and, where appropriate, capitalize direct and indirect costs properly allocable to long-term contracts. lnclude a description of the
method(s) used for allocating indirect costs to intermediate cost objectives such as departments or activities prior to the allocation of
such costs to long-term contracts, real or tangible personal property produced, and property acquired for resale. The description
must include the following:
1 The method of allocating direct and indirect costs (i.e., specific identification, burden rate, standard cost, or other reasonable
allocation method).
2 The method of allocating mixed service costs (i.e., direct reallocation, step-allocation, simplified service cost using the labor-
based allocation ratio, simplified service cost using the production cost allocation ratio, or other reasonable allocation
method).
3 The method of capitalizing additional section 2634 costs (i.e., simplified production with or without the historic absorption
ratio election, simplified resale with or without the historic absorption ratio election including permissible variations, the U.S.
ratio, or other reasonable allocation method).
Section B-Direct and lndirect Costs Required To Be Allocated
Check the appropriate boxes showing the costs that are or will be fully included, to the extent required, in the cost of real or tangible
personal property produced or property acquired for resale under section 263A or allocated to long-term contracts under section
460. Mark "N/A" in a box if those costs are not incurred by the applicant. lf a box is not checked, it is assumed that those costs are
not fully included to the extent required. Attach an explanation for boxes that are not checked.
Proposed method
Direct material
Direct labor
lndirect labor
Officers' compensation (not including selling activities) .
Pension and other related costs
Employee benefits .
lndirect materials and supplies .
Purchasing costs
Handling, processing, assembly, and repackaging costs
Offsite storage and warehousing costs
Depreciation, amortization, and cost recovery allowance for equipment and facilities
placed in service and not temporarily idle
Depletion .
Rent
Taxes other than state, local, and foreign income taxes .
lnsurance .
Utilities
Maintenance and repairs that relate to a production, resale, or long-term contract activity
Engineering and design costs (not including section't74 research and experimental
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expenses)
Rework labor, scrap, and spoilage
Tools and equipment
Quality control and inspection
Bidding expenses incurred in the solicitation of contracts awarded to the applicant
Licensing and franchise costs
Capitalizable service costs (including mixed service costs)
Administrative costs (not including any costs of selling or any return on capital)
Research and experimental expenses attributable to long-term contracts .
lnterest
Other costs a list of these
(Rev.12-2009)
Form 3115 (Rev. 12-2009)eage 8
Method of Cost
Section G-Other Costs Not Required To Be Allocated (Complete Section C only if the applicant is requesting to change its
method for these costs.)
Proposed method
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Marketing, selling, advertising, and distribution expenses
Research and experimental expenses not included in Section B, line 26
Bidding expenses not included in Section B,line 22
General and administrative costs not included in Section B
lncome taxes
Cost of strikes
Warranty and product liability costs
Section 179 costs
On-site storage
Depreciation, amortization, and cost recovery allowance not included in Section B,
line 11
Other costs a list of these
Applicants requesting approval to change their method of accounting for depreciation or amortization complete this section.
Applicants must provide this information for each item or class of property for which a change is requested.
Note. See the Ust of Automatic Accounting Method Changes in the instructions for information regarding automatic changes
undersections56, 167, 168, 197, 14001, 1400L,orformer secflon 168.DonotfileForm3115withrespecttocertainlateelections
and election revocations (see instructions).
1 ls depreciation for the property determined under Regulations section 1.167(a)-1 1 (CLADR)? ! yes E tto
lf "Yes," the only changes permitted are under Regulations section 1 .167(a)-1 1(cX1XiiD.
2 ls any of the depreciation or amortization required to be capitalized under any Code section (e.9., section263A)?. EYes Etto
3 Has a depreciation, amortization, or expense election been made for the property (e.9., the election under
sections 168(0(1), 179, or 179C)? fl Yes fl no
lf "Yes," state the election made )
4a To the extent not already provided, attach a statement describing the property being changed. lnclude in the description the
type of property, the year the property was placed in service, and the property's use in the applicant's trade or business or
income-producing activity.
lf the property is residential rental property, did the applicant live in the property before renting it?E yes E ttoEYes ENols the property public utility property?
To the extent not already provided in the applicant's description of its present method, attach a statement explaining how the
property is treated under the applicant's present method (e.9., depreciable property, inventory property, supplies under
Regulations section 1.162-3, nondepreciable section 263(a) property, property deductible as a current expense, etc.).
lf the property is not currently treated as depreciable or amortizable property, attach a statement of the facts supporting the
proposed change to depreciate or amortize the property.
ff the property is currently treated and/or will be treated as depreciable or amortizable property, provide the following
information for both the present (if applicable) and proposed methods:
The Code section under which the property is or will be depreciated or amortized (e.g., section 168(g)).
The applicable asset class from Rev. Proc. 87-56, 1987-2 C.B. 674, for each asset depreciated under section 168 (MACRS) or
under section 1400L; the applicable asset class from Rev. Proc. 83-35, 1983-1 C.8.745, for each asset depreciated under
former section 168 (ACRS); an explanation why no asset class is identified for each asset for which an asset class has not
been identified by the applicant.
The facts to support the asset class for the proposed method.
The depreciation or amoilization method of the property, including the applicable Code section (e.9.,200% declining balance
method under section 168(b)(1).
The useful life, recovery period, or amortization period of the property.
The applicable convention of the property.
A statement of whether or not the additional first-year special depreciation allowance (for example, as provided by section
168(k), 168(l), 168(m), 168(n), 1400L(b), or 1a00N(d)) was or will be claimed for the property. lf not, also provide an explanation
as to why no special depreciation allowance was or will be claimed.
b
c
a
b
c
d
e
f
I
Schedule E-Change in Depreciation or Amortization (see instructions)
rorm 31 15 6ev. 12-2oos)
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 31,2013
Name of Applicant
The parent of the consolidated group, Berkshire Hathaway Inc., (EIN 47-0813844), is
filing the accounting method change on behalf of the following subsidiary (hereinafter
collectively referred to as the "Taxpayer").
Name EINPacifiCorp 93-0246090
Paee 2. Part II. Ouestions 4(c) - 6. Examination. Anpeals and US Tax Court Status
Taxpayer is applying for an automatic change to make a late general asset election under
Revenue Procedure 20ll-14 and Revenue Procedure2012-20. Section 6 of Revenue
Procedure 2012-20 modifies Revenue Procedure 20ll-14 and provides for a waiver of
the Section 4.02 scope limitations for this automatic change in accounting method.
Accordingly, no consent of the district director is required or notification of exam or
appeals.
Paee 2. Part II. Ouestion 5(a) Appeals Contact
Taxpayer (part of Berkshire Hathaway return) is currently before Appeals for the tax
years ended December 31,2006 - December 31,2009. The appeals officer is Paul
Vanchena, telephone number (41 4) 231 -21 04.
Page 2. Part II. Ouestion 6. Parent Corporation's Information
For Question 4a and 5a
Parent Corporation's Name Berkshire Hathaway Inc.
Parent Corporation's EIN 47-0813844
Parent Corporation's Address 3555 Farnam Street, Suite 1440, Omaha, NE 68131
Parent Corporation's Tax Years December 3I,2006 - December 31,2009
At Appeals
Parent Corporation's Name Berkshire Hathaway Inc.
Parent Corporation's EIN 47-0813844
Parent Corporation's Address 3555 Farnam Street, Suite 1440, Omaha, NE 68131
Parent Corporation's Tax Years December 3t,20I0 and December 3l,20ll
Under Exam
1 of6
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 31,2013
Page 2. Part II. Ouestions 9b.9c & 10b. prior. nending and concurrent accounting
method chanee requests and private letter rulings
Taxpayer is a member of the Berkshire Hathaway consolidated group. Each member of
the group operates autonomously. Information related to pending requests for private
letter rulings, changes in accounting method, or technical advice by other members of the
group will be provided upon request.
Taxpayer and its immediate affiliates within the MidAmerican Energy Holdings
Company subgroup and PacifiCorp subgroup within the Berkshire Hathaway
consolidated group have filed for a change in accounting method (or private letter
rulings) as set out in the attached Exhibit 1.
Pase 3. Part II. Ouestion 12a. 12b. L2c. 12d
a) The item being changed:
The Taxpayer is requesting permission to make a general asset account election under
sections 168(i)(4), 1.168(i)-1, and 1.168(i)-1T for Taxpayer's MACRS property placed in
service by the Applicant in taxable years beginning before January 1,2012, as specified
in Section 6.32 of the Appendix of Rev. Proc. 20ll-14. This election is for Taxpayer's
MACRS property used in the Taxpayer's Electric Generation, Transmission and
Distribution trade or business, placed in service by Taxpayer in taxable years beginning
before January 1,2012, with a net tax basis as of December 31, 2012.
The Taxpayer's proposed change in method of accounting for federal income tax
purposes is not related to the adoption of the International Financial Reporting Standards
(IFRS) for financial statement purposes.
b) The applicant's present method for the item being changed:
The Taxpayer has not made a general asset account election for MACRS property placed
in service prior to January 1,2012.
c) The applicant's proposed method for the item being changed:
Under the Taxpayer's proposed method of accounting, Taxpayer will make a general
asset account election under section 168(iX4), 1.168(D-1, and 1.168(i)-1T for Taxpayer's
MACRS property used in the Taxpayers' Electric Generation, Transmission and
Distribution trade or business, placed in service by Taxpayer in taxable years beginning
before January 1,2012, with a net tax basis as of December 31, 2012.
2of6
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 31,2013
The Taxpayer requests permission to elect under Reg. 1.168(i)-1 to group certain
generation, transmission and distribution assets into various general asset accounts by
vintage (placed in service date) and by tax class. Taxpayer's tax class is an intemally
developed methodology of classiffing assets into the appropriate (l) applicable
depreciation method, (2) the applicable recovery period, and (3) the applicable
convention per IRC Section 168 and 167(a).
d) The applicant's present overall method of accounting:
The Taxpayer's overall method of accounting is the accrual method.
Page 3. Part II. Ouestion 13. Descrintion of Apnlicant's Trades and Businesses
PacifiCorp is a public utility engaged in generation and transmission of electricity to
retail customers in six western states. Its principal business activity code is 221100.
Pase 3. Part II. Ouestion 14. Proposed Method and Use in Financial Statements
The proposed tax method of accounting for a late general asset account election does not
meet generally accepted accounting principles as defined by the Financial Accounting
Standards Board, the Securities and Exchange Commission and the Federal Energy
Regulatory Commission. Therefore, the proposed method of accounting will not be used
for applicant's books and records and financial statements.
Paee 3. Part IV. Ouestion 25. Section 481(a) Adiustment
Taxpayer has not made a general asset account election for its MACRS property placed
in service prior to January l, 2012. Under the Taxpayer's proposed method of
accounting, the Taxpayer will make a late general asset account election under section
168(iX4), 1.168(i)-1, and 1.168(D-1T for the Taxpayer's MACRS property used in the
Taxpayers' Electric Generation, Transmission and Distribution trade or business, placed
in service by the Taxpayer in taxable years beginning before January l, 2012 with a net
tax basis as of December 31, 2012.
The Section 481(a) adjustment for tax year 2013 under the proposed method will be zero
because the Taxpayer is only electing GAA for assets with a net tax basis as of December
31,2012, i.e., assets that are on hand that have not been disposed. Assets disposed in
prior years were not under a GAA election, and consequently are allowed loss treatment.
Thus, no gain or loss recapture is required.
3 of6
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 31,2013
Statement Required Under Rev. Proc.2011-14. as modified bv Rev. Proc.2012-20.
SsIlr4iJA4G)
The Taxpayer is making the change specified in section 6.32(1)(a)(i) of this APPENDIX.
Consequently, the Taxpayer must attach to its Form 3ll5 a statement with a description
of the asset(s) to which this change applies.
The Taxpayer is only electing GAA for MACRS assets used in the Taxpayers' Electric
Generation, Transmission and Distribution trade or business, with a net tax basis as of
December 31,2012, i.e., assets that are on hand that have not been disposed.
Statement Required Under Rev. Proc.2011-14. as modified bv Rev. Proc.2012-20.
Section 6.32(4Xe).
Taxpayer is making the changed specified in section 6.32(1)(a)(i) of this APPENDIX.
Consequently, Taxpayer:
(i) Consents to and agrees to apply, all of the provisions of $ 1 .168(i)- 1, and $ 1 .168(i)-
1T to the assets that are subject to the election specified in section
6.32(1)(a)(i) of this APPENDIX; and
(ii) Except as provided in $ 1.168(i)-1T(c)(1Xii)(A), (eX3), (g), or (h), the election
made by Taxpayer under section 6.32(l)(a)(i) of this APPENDIX is irrevocable
and will be binding on the Taxpayer for computing taxable income for the year of
change and for all subsequent taxable years with respect to the assets that are
subject to the election.
Statement Required Under Rev. Proc. 20ll-14. as modified by Rev. Proc. 2012-20.
Section 6.32(4Xfl.
Taxpayer is making the changed specif,red in section 6.32(1)(a)(i) of this APPENDIX.
Consequently, Taxpayer agrees to the following additional terms and conditions:
(i) a normalization method of accounting (within the meaning of $ 168(i)(9)) will be used
for the public utility property subject to the application;
(ii) within 30 calendar days of filing the federal income tax return for the year of change,
Taxpayer will provide a copy of the completed application to any regulatory body having
jurisdiction over the public utility property subject to the application; and
(iii) as of the beginning of the year of change, Taxpayer will adjust its deferred tax
reserve account or similar account in Taxpayer's regulatory books of account by the
4of6
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 3ln 2013
amount of the deferral of federal income tax liability associated with the $ a81(a)
adjustment applicable to the public utility properly subject to the application.
5 of 6
Berkshire Hathaway Inc.
EIN:47-0813844
Attachment to Form 3115, Application for Change in Accounting Method
General Asset Account Election (Automatic Change #180
Tax Year Ending December 3lr20l3
Exhibit I
MidAmerican E Holdin Com Method Cha
Cornoration EIN
Year of
Chanse Status Issue
MidAmerican Energy
Comoanv
42-1425214 2009 Consent
Received
Change in method of accounting for mixed
service costs under Section 263A
MidAmerican Energy
Company
42-1425214 2009 Automatic Routine repairs and maintenance costs on gas
network assets and associated retirements (2
method chanses)
MidAmerican Energy
Company
42-1425214 2011 Automatic
Concurrent
Routine repairs and maintenance costs on
network assets and associated retirements -
Adoption ofRev. Proc. 201 l-43 safe harbor
units of nrooertv
MidAmerican Energy
Company
42-14252t4 2013 Automatic
Concurrent
Late General Asset Account Election
pursuant to Rev. Proc. 201 1-14 and Rev Proc
2012-20
Kern River Gas
Transmission Company
76-01 854ss 2009 Automatic Routine repairs and maintenance costs on
network assets and associated retirements (2
method chanses)
PacifiCorp 93-0246090 2009 Withdrawn
by Taxpayer
- Requested
Method
Change Did
Not Clearly
Reflect
Income
Change in method of accounting for mixed
service costs under Section 263A
PacifiCorp 93-0246090 2011 Automatic
Concurrent
Routine repairs and maintenance costs on
network assets and associated retirements -
Adoption of Rev. Proc. 201 l-43 safe harbor
units ofpropefi
PacifiCorp 93-0246090 2013 Automatic
Concurrent
Late General Asset Account Election
pursuant to Rev. Proc. 201 l-14 and Rev Proc
2012-20
6 of 6