An Operator shall attribute all costs, assets and revenues recorded under Entity Accounting to First Category Segments, Second Category Segments, and Other Segment. The Operator shall further attribute the data items under the First Category Segment into its constituting Licensed Service segments.
Licensed Service segments include "Local Network Business", "Long Distance Network Business", "International Network Business", "Leased-Circuit Business", "Cellular Phone services",” Third Generation Mobile Telecommunications Service”,” Wireless Broadband Access Services”, "Digital Low-powered Cordless Phone services", "Radio Paging services", "Mobile Data services", "Trunked Radio services", "Mobile Satellite Services", "Fixed Satellite Services", and " Satellite TV programs uplink services".
The DGT may require the Operator to disaggregate the financial data of aforementioned Licensed Service segments by operational items.
The separations accounting-related information provided by the Operator must be consistent with its Entity Accounting-related information.

The costs, assets, and revenues unrelated to the operation of Licensed Segment shall be recorded separately, from those associated with the operation of Licensed Segment, in an Operator's records, subsidiary ledgers and general ledgers. When recording separately is infeasible, the separation methodologies prescribed shall apply.

In implementing accounting separation, an Operator shall adhere to the following principles:
a. Costs, assets, and revenues shall be attributed to Licensed Service segments in accordance with the activities that cause those costs, assets, or revenues to arise.
b. The attribution of cost, assets, and revenues shall be objective and unbiased.
c. There shall be consistency of separation treatments from year to year.
d. The attribution methods used for costs, assets and revenues shall be reasonable and transparent.
e. Where sampling is used, it shall be based on generally accepted statistical techniques or methods.

Accounting separation shall be performed based on the financial information resident in the Operators' accounting systems that meet the requirements of this Code, and operational information.
Operational information shall include information relating to network architecture, network capacity, network usage, service and business volumes and other measures of activity.

The methods for recording internal transactions shall be documented in an Operator's Procedure Manual.
The internal transactions between individual Licensed Service segments, such as receipt and provision of products, services, and use of property, as well as asset transfers shall be recorded in an Operator's accounting system.

An Operator shall classify each item of costs, assets, and revenues, based on its relevance to Licensed Service segments, into following categories:
a. Direct and directly attributable items: those items which can be directly and unambiguously related to individual Licensed Service segments and can be traced against the relevant Licensed Service segments in the Operator's records, subsidiaries ledgers and general ledgers.
b. Indirectly attributable items: those items which can be related to individual Licensed Service segments on a non-arbitrary basis, but cannot be traced against the relevant Licensed Service segments in the Operator's records, subsidiaries ledgers and general ledgers.
c. Unattributable items: those items for which no direct or indirect method of apportionment can be identified.
To the extent possible, those items which can be determined to be directly and unambiguously related to individual segments shall be recorded against the relevant Licensed Service segments in the Operator's records, subsidiaries ledgers and general ledgers.

After classifying costs, assets, and revenues under Article 16, an Operator shall perform separation procedures in the following ways:
a. Direct and directly attributable items shall be directly allocated to those Licensed Service segments that are identified to cause those items to arise.
b. Indirectly attributable items shall be allocated to the relevant segments using appropriate drivers.
c. Unattributable items shall be allocated to Licensed Service segments using the Attributable Cost Method.

In implementing Separations Accounting under Article 17 for an indirectly attributable item, an Operator shall follow the following procedures and methods of driver analysis and data collection:
a. The Operator shall first review the indirectly attributable item's relation to the intermediate activities of providing services, and then review the relation between the intermediate activities and Licensed Service segments, to identify the drivers.
b. The Operator shall set up data pools to collect data associated with each of the intermediate activities, and allocate the items in each pool to individual Licensed Service segments, using the drivers identified earlier.

In allocating indirectly attributable costs, assets, and revenues, an Operator may adopt sampling techniques to estimate the measures required by the driver analysis.

Operating costs shall be attributed, under Articles 16 through 19, either directly to individual Licensed Service segments or to cost pools called Network Components, Supporting Functions, and General Administrative and Miscellaneous Functions. These are defined as follows:
a. Services cost pool: This pool contains the costs that can be directly identified with a particular Licensed Service segment, including those costs of network components, supporting functions, as well as general administrative and miscellaneous functions that can be directly attributed to a particular Licensed Service segment.
b. Network Components cost pool: This pool contains the costs relating to the various components of transmission, switching, local loop and other network plant and systems. The costs will be in respect of network components that cannot be attributed directly to a particular Licensed Service segment as they are utilized in the provision of a number of services.
c. Supporting Functions cost pool: This pool contains the costs of functions necessary for the provision of services to the customers and for supporting the network components, excluding those functions which can be directly attributed to a particular Licensed Service segment. Examples of supporting functions include network planning, power plant, billing, maintenance, and customer services.
d. General Administrative and Miscellaneous Functions cost pool: This pool contains the costs of functions that are not related to the provision of a particular service but are an important part of the operations of an Operator. Examples of such costs include planning, personnel, and general finance.
Operating costs are those direct and indirect costs necessary and reasonable for an Operator to provide services. Examples of such costs include depreciation, personnel costs, and advertising expenditures.
Operating costs with similar drivers may be combined in the attribution process.

The network components shall be unbundled into local loops, exchange equipment, transmission equipment, trunks, network interfaces, directory equipment and services, signaling network equipment and base stations.
The unbundled network components shall be assigned to individual Licensed Service segments, to the extent possible.

The supporting functions shall be decomposed into network management, power, materials management, billing and collection, customer service, marketing, sales commission, installation, product development, and other supporting functions. For those functions that can not be classified into these items, additional categories shall be employed.

The general administrative and miscellaneous functions shall be decomposed into executive and planning, procurement, finance and accounting, information technology, research and development, regulatory affairs, other general administrative functions, and miscellaneous functions.

After the cost pool decompositions under Articles 21 through 23, each of those decomposed cost pools whose constituent cost items are related to individual Licensed Service segments through multiple cost drivers shall be further decomposed according its cost drivers.

In the cost data collection process, costs incurred shall first be attributed to individual operational units that directly causes the costs to arise, and then follow the Separations Accounting methodologies prescribed under Articles 20 through 24.
The cost data collection process could involve a number of detailed sub-processes, depending on how the cost information is initially captured in an Operator's accounting system. The attribution of costs shall follow the Separations Accounting methodology prescribed in this Code.

The personnel related costs shall be allocated to activities that have a more causal relationship with Licensed Service segments, based on work time distribution studies for individuals performing each intermediate activity, and weighted average hourly rate of the individuals performing the intermediate activity. The Separations Accounting methodology prescribed under Section 25 shall then apply.

Depreciation charges shall be allocated to individual operational units using the Separations Accounting methodologies prescribed under Articles 35 through 43 for related assets. The Separations Accounting methodology prescribed under Article 25 shall then apply.

After classifying operating costs under Articles 20 through 24, an Operator shall perform cost allocation in the following tiered steps:
a. To allocate the costs of General Administrative and Miscellaneous Functions across Services, Network Components, and Supporting Functions cost pools, using Attributable Cost Method.
b. To allocate the Supporting Functions costs to Services cost pools, and Network Components cost pools, based on appropriate cost drivers.
c. To allocate the Network Components costs to Services cost pools based on appropriate cost drivers.
d. To group Services costs into Licensed Service segments.

In the cost driver analysis, network components shall be first disaggregated into traffic sensitive and non-traffic sensitive network components using equipment records.
"Traffic sensitive network components" means the components of the network which are used by a number of customers in common. "Non-traffic sensitive network components" means the components of the network which are dedicated to a particular customer.
The costs of traffic sensitive network components shall be allocated to individual Licensed Service segments on the basis of network usage.
The costs of non-traffic sensitive network components are allocated to individual Licensed Service segments on the basis of network resources used.
The network component cost data shall be prepared to the extent of seperate exchange office or exchange area.

Detailed guidelines on cost allocation bases under Article 28 are prescribed separately in a supplement to this Code by the DGT.

The costs associated with spare capacity shall be allocated to individual Licensed Service segments, based on the same allocation methodology as working facilities of plant and equipment.
The costs associated with spare capacity, as referred to in the first paragraph, such as network equipment, land, and buildings, results from economies in the provisioning for current and future communications plant and equipment needs.

Except for the use of an internal jointly acquired asset under Article 33, the receipt and provision of products, services, and use of property between Licensed Service segments shall be accounted for using the Separations Accounting methodology prescribed under Article 6.

The periodic costs of an internal jointly acquired asset shall be allocated to individual Licensed Service segments, using the Separation Accounting methodology prescribed under Article 8.
An internal jointly acquired asset is an asset that is purchased or constructed with an intention of it being used by two or more Licensed Service segments, and has limited alternative uses.

In the process of cost separation, a cost item shall preserve the same account title as it is shown in the Operator's entity statement of income.

Assets shall be attributed, using the Separation Accounting methodologies prescribed under Articles 20 through 24.

In performing the data collection for asset attribution, an Operator shall follow the data collection process prescribed under Article 25.

After being classified into data pools under Article 35, assets shall be allocated to individual Licensed Service segments, using the allocation process prescribed under Article 28.

An asset transferred between individual Licensed Service segments shall be recorded as prescribed under Article 5.

Spare capacity shall be attributed to individual Licensed Service segments, using the Separations Accounting methodology prescribed under Article 31 for the associated costs.

Internal jointly acquired assets shall be allocated to individual Licensed Service segments, using the Separations Accounting methodology prescribed under Article 8.

Unless otherwise approved by the DGT, an asset associated with the receipt and provision of non-telecommunications services or the use of property between Licensed Service segments, shall be allocated to individual Licensed Service segments using the same separations accounting methodology for its associated operating costs.

In the process of asset separation, an asset shall preserve the same account title as shown in the Operator's entity balance sheet.

Detailed guidelines on Asset Separations Accounting methodology are prescribed separately in a supplement to this Code by the DGT.

The capital cost allowed for the investment in a Licensed Service segment or in an activity shall be the product of the Operator's cost of capital multiplied by the value of capital employed by the Licensed Service segment or the activity.

The capital employed by a Licensed Service segment or an activity shall be its associated assets attributed under Articles 35 through 43. It shall include fixed assets and working capital directly employed, as well as other assets attributed by allocation.

The cost of capital of an Operator shall reflect the Operator's opportunity cost of funds invested.
To the extent possible, the cost of capital applicable to a Licensed Service segment shall reflect the different financial and operating risks faced by the Licensed Service segment.

The cost of capital applicable to a network component or an activity shall be the cost of capital of the Licensed Service segment with which the network component or the activity is associated. A network component or an activity shared among various Licensed Service segments shall be subject to several applicable cost of capital, depending on how the network component or the activity is attributed into individual Licensed Service segments.

Detailed guidelines on computing the capital cost are prescribed separately in a supplement to this Code.

In the case of a revenue stream that relates to only one Licensed Service segment, the revenue shall be directly assigned to the Licensed Service segment to which it relates, based on accounting records and billing system information.

In the case of a bundled revenue stream that relates to more than one Licensed Service segments, the revenue shall be unbundled and allocated to the relevant Licensed Service segments, in relation to the costs associated with individual elements in the bundled revenue stream.