The use of regulatory accounting under both ASC 980 and GASB 62 is well suited for instances of major storm damage clean-up, i.e. snow, ice, hurricanes, tornados, fire. Here’s a common example of smoothing utility rates for recovery of uninsured storm damages.

Impairment of fixed assets is a big reality in today’s energy markets. With the shift to renewables and greater usage of natural gas, power and utilities organizations may find themselves with legacy power supply units that are “out of the money” when it comes to pricing. The issue is how to recognize impairment losses while recovering debt payments on those units. Regulatory accounting under ASC 980 and GASB 62 are the answer.