# ASC 250-980-55: Accounting Changes and Error Corrections — Regulated Operations — 55 Implementation Guidance and Illustrations

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/250/980/#55-implementation-guidance-and-illustrations)

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## ASC 250-980-55: 55 Implementation Guidance and Illustrations

[Read section](https://asc.understandingaccounting.org/asc/250/980/#55-implementation-guidance-and-illustrations)

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#### Implementation Guidance

##### [250-980-55-1](https://asc.understandingaccounting.org/asc/250/980/#250-980-55-1)

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All of the following guidance assumes that the entity meets the criteria in paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2); thus, recovery of any cost is probable if that cost is designated for future recovery by the regulator.

##### [250-980-55-2](https://asc.understandingaccounting.org/asc/250/980/#250-980-55-2)

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Topic 250 defines various types of accounting changes and establishes guidelines for reporting each type.

##### [250-980-55-3](https://asc.understandingaccounting.org/asc/250/980/#250-980-55-3)

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If a regulated entity changes accounting methods and the change does not affect costs that are allowable for rate-making purposes, the regulated entity would apply the change in the same manner as would an unregulated entity. If a regulated entity changes accounting methods and the change affects [allowable costs](https://asc.understandingaccounting.org/glossary/a/#allowable-costs "All costs for which revenue is intended to provide recovery. Those costs can be actual or estimated. In that context, allowable costs include interest cost and amounts provided for earnings on shareholders' investments.") for rate-making purposes, the change generally would be implemented in the way that it is implemented for regulatory purposes. A change in the method of accounting for research and development costs, either from a policy of capitalization and amortization to one of charging those costs to expense as incurred or vice versa, is an example of that type of change.

##### [250-980-55-4](https://asc.understandingaccounting.org/asc/250/980/#250-980-55-4)

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Paragraphs

[250-10-45-25 through 45-26](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-25)

limit prior period adjustments (other than those that result from reporting accounting changes) to corrections of errors and adjustments related to prior interim periods of the current fiscal year.

##### [250-980-55-5](https://asc.understandingaccounting.org/asc/250/980/#250-980-55-5)

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In accordance with Section 250-10-45, estimated refunds that were not previously accrued would be charged to income in the first period in which they meet the criteria for accrual (see paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2)). If the amounts are material, the disclosures specified in paragraph [980-605-50-1](https://asc.understandingaccounting.org/asc/605/980/#605-980-50-1) should be furnished.