Regulatory Asset

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
  5. Current Assets

    1. A balance sheet account that represents the value of all assets ...
  6. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
Related Articles
  1. Water: The Ultimate Commodity
    Mutual Funds & ETFs

    Water: The Ultimate Commodity

  2. Do
    Entrepreneurship

    Do "Widow And Orphan" Stocks Still Exist?

  3. What are defensive stocks?
    Investing

    What are defensive stocks?

  4. Which leverage ratios are most useful ...
    Fundamental Analysis

    Which leverage ratios are most useful ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center