SECTION 7. CHANGE IN METHOD

OF ACCOUNTING

.01 In general . A change to the transmission and distribution property safe harbor method described in this revenue procedure is a change in method of accounting to which the provisions of §§ 446 and 481, and the regulations thereunder, apply. A taxpayer that wants to change to the method of accounting described in this revenue procedure must use the automatic change in method of accounting provisions in Rev. Proc. 2011–14, or its successor, as modified by this revenue procedure.

.02 Statistical sampling and extrapola- tion . Taxpayers adopting the safe harbor method of accounting provided in this revenue procedure may use statistical sampling to determine the § 481(a) adjustment amount attributable to any single taxable year by following the sampling procedures provided in Rev. Proc. 2011–42. In addition, taxpayers adopting the safe harbor method of accounting provided in this revenue procedure may extrapolate results to determine the § 481(a) adjustment amount for certain years by following the relevant procedures provided in Appendix A to this revenue procedure. Sampling or extrapolation methodologies not described in Rev. Proc. 2011–42 or Appendix A to this revenue procedure are not permitted under the safe harbor method of accounting.

.03 Automatic change . Rev. Proc. 2011–14 is modified to add new section 3.09 to the APPENDIX, to read as follows: .09 Method of accounting under Rev. Proc. 2011–43 for taxpayers in the busi-

ness of transporting, delivering, or selling electricity .

(1) Description of change . This change applies to a taxpayer that is within the scope of Rev. Proc. 2011–43 and wants to change its treatment of transmission and distribution property expenditures to adopt the method of accounting described in Rev. Proc. 2011–43.

(2) Waiver of scope limitations . The scope limitations in section 4.02 of this revenue procedure do not apply to an electric transmission or distribution company that changes to the method of accounting provided in Rev. Proc. 2011–43 for its first or second taxable year ending after December 30, 2010.

(3) Section 481(a) adjustment . A taxpayer must take the entire net § 481(a) adjustment into account (whether positive or negative) in computing taxable income in the year of change. The § 481(a) adjustment shall not include any amount attributable to property for which the taxpayer elected to apply the repair allowance under § 1.167(a)–11(d)(2) for any taxable year in which the election was made. For guidance regarding permissible § 481(a) calculation methodologies, see Rev. Proc. 2011–43, section 7.02 and Appendix A. (4) Ogden copy of Form 3115 required in lieu of national office copy . A taxpayer changing its method of accounting under section 3.09 of the APPENDIX must file a signed copy of its completed Form 3115 with the IRS in Ogden, UT, (Ogden copy) in lieu of filing the national office copy no earlier than the first day of the year of change and no later than the date the taxpayer files the original Form 3115 with its federal income tax return for the year of change. See sections 6.02(3)(a)(ii)(B)

September 12, 2011 330 2011–37 I.R.B.

APPENDIX A

Sampling and Extrapolation Guidance