Regulatory Asset


DEFINITION of 'Regulatory Asset'

Specific costs or revenues that a regulatory agency permits a U.S. public utility (usually an energy company) to defer to its balance sheet. These amounts would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues.

BREAKING DOWN 'Regulatory Asset'

The accounting methods used to disclose regulatory assets may cause differences in how an electric utility company's financial condition is reported. For example, under U.K. GAAP, these assets are currently recorded on the balance sheet.

Under recently developed International Financial Reporting Standards, regulatory assets are not permitted to be recognized on the balance sheet. Instead, costs will be charged to the income statement when incurred, and recoveries from customers will be recognized when receivable.

  1. International Financial Reporting ...

    A set of international accounting standards stating how particular ...
  2. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  3. Current Assets

    A balance sheet account that represents the value of all assets ...
  4. Asset

    1. A resource with economic value that an individual, corporation ...
  5. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
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