{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/350/980/","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","number":"350-980","topic":"350","title":"Regulated Operations","area":"Assets","paragraphs":7,"summary":"This subtopic applies Topic 350's goodwill and intangibles guidance to entities with regulated operations. Its core rule is that goodwill is not amortized and is tested for impairment under Topic 350 unless a regulator permits amortization of goodwill as an allowable cost for rate-making purposes, in which case the regulator's action provides reasonable assurance of a regulatory asset that is amortized over the period allowed for rate-making. It also addresses long-term power sales contracts acquired in a business combination and the need to review such contracts for loss-contract status.","concepts":["goodwill","regulatory asset","allowable cost for rate-making","goodwill amortization","long-term power sales contract","loss contract","acquired contract premium","regulated operations"],"categories":["Subsequent measurement","Intangibles and goodwill","Industry-specific","Impairment"],"level":"intermediate","topic_title":"Intangibles—Goodwill and Other","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"350-980-05-1","para":"05-1","html":"
This Subtopic provides guidance for goodwill and other intangible assets for entities with regulated operations.
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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15.
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Topic 350 states that goodwill shall not be amortized and shall be tested for impairment in accordance with that Subtopic. For rate-making purposes, a regulator may permit an entity to amortize purchased goodwill over a specified period. In other cases, a regulator may direct an entity not to amortize goodwill or to write off goodwill.
","snippet":"Topic 350 states that goodwill shall not be amortized and shall be tested for impairment in accordance with that Subtopic. For rate-making purposes, a regulator may permit an entity to amortize purchased goodwill over a …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6903dd96f1bfcf83575049ecd980ee46702f22d8d7c3cdbd65b560263a3c6481","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}},{"citation":"350-980-35-2","para":"35-2","html":"
If the regulator permits all or a portion of goodwill to be amortized over a specific time period as an allowable cost for rate-making purposes, the regulator's action provides reasonable assurance of the existence of a regulatory asset (see paragraph 980-340-25-1). That regulatory asset would then be amortized for financial reporting purposes over the period during which it will be allowed for rate-making purposes. Otherwise, goodwill shall not be amortized and shall be accounted for in accordance with Topic 350.
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A long-term power sales contract that is not accounted for as a derivative instrument under Topic 815 shall be periodically reviewed to determine whether it is a loss contract in which the loss shall be recognized immediately.
","snippet":"A long-term power sales contract that is not accounted for as a derivative instrument under Topic 815 shall be periodically reviewed to determine whether it is a loss contract in which the loss shall be recognized immedi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:62d75681251774e0edaaae7f520268d71ff2d3c213b709790e89aa4d9c3710d0","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}},{"citation":"350-980-35-4","para":"35-4","html":"
For long-term power sales contracts acquired in a purchase business combination, any premium related to a contractual rate in excess of the current market rate should be amortized over the remaining portion of the respective portion of the contract. For example, if the above market rate relates to the fixed or scheduled portion of the contract, the premium would be amortized over the remaining fixed period of the acquired contract.
","snippet":"For long-term power sales contracts acquired in a purchase business combination, any premium related to a contractual rate in excess of the current market rate should be amortized over the remaining portion of the respec…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:006566ba4d6402f65818d4a780d27da2da561a0267bde8a7b9ba7997d975da57","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}},{"citation":"350-980-35-5","para":"35-5","html":"
See paragraph 980-605-25-15 for a discussion of a long-term power sales contract that meets the definition of a derivative.
","snippet":"See paragraph 980-605-25-15 for a discussion of a long-term power sales contract that meets the definition of a derivative.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3532d118bdaa81024334afe9caef677cc1624c571eb02dbd4834c7380ebd7fc8","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3eb2daae4982294c2aea05b466ea6281a2818c93084fc1dbb3affd7a2bafc486","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:da6bae9af7abbe99cb1b405776ed35f22699ecd5b80226e89afc79fb71214f3c","downloaded_from":"2026-09-10T00:05:19.146Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478966","source_sha256":"50b2534e9d81fdd3487c23c1d8c098f2535d5613af58b1ea6aa085905e7aad9c"}}],"enrichment":{"summary":"This subtopic applies Topic 350's goodwill and intangibles guidance to entities with regulated operations. Its core rule is that goodwill is not amortized and is tested for impairment under Topic 350 unless a regulator permits amortization of goodwill as an allowable cost for rate-making purposes, in which case the regulator's action provides reasonable assurance of a regulatory asset that is amortized over the period allowed for rate-making. It also addresses long-term power sales contracts acquired in a business combination and the need to review such contracts for loss-contract status.","key_points":["Goodwill generally shall not be amortized and shall be tested for impairment in accordance with Topic 350, even for entities with regulated operations (350-980-35-1).","A regulator may permit amortization of purchased goodwill over a specified period, direct that goodwill not be amortized, or direct a write-off of goodwill for rate-making purposes (350-980-35-1).","If the regulator permits all or part of goodwill to be amortized as an allowable cost for rate-making, that action provides reasonable assurance of a regulatory asset (see 980-340-25-1), which is then amortized for financial reporting over the period allowed for rate-making (350-980-35-2).","Absent such regulatory action, goodwill is not amortized and is accounted for under Topic 350 (350-980-35-2).","A long-term power sales contract not accounted for as a derivative under Topic 815 must be periodically reviewed to determine whether it is a loss contract requiring immediate loss recognition (350-980-35-3).","For long-term power sales contracts acquired in a purchase business combination, a premium for a contractual rate in excess of the current market rate is amortized over the remaining portion of the respective portion of the contract (for example, over the remaining fixed or scheduled period) (350-980-35-4).","The scope follows Section 980-10-15, and paragraph 980-605-25-15 addresses power sales contracts meeting the definition of a derivative (350-980-15-1; 350-980-35-5)."],"categories":["Subsequent measurement","Intangibles and goodwill","Industry-specific","Impairment"],"audience_level":"intermediate","student_note":"The key insight is that rate regulation does not create an exception to the no-amortization rule for goodwill itself; instead, the regulator's allowance converts the recoverable amount into a regulatory asset that is amortized. Students often mistakenly say regulated entities may simply amortize goodwill.","related_topics":["350-20","980-10","980-340","980-605","815","805"],"key_concepts":["goodwill","regulatory asset","allowable cost for rate-making","goodwill amortization","long-term power sales contract","loss contract","acquired contract premium","regulated operations"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e38826702d5465d37a69727de505209c46c2479b1cd93dd116bcfa2d41f6949f","downloaded_from":"2026-09-10T00:05:12.805Z","last_downloaded_at":"2026-09-10T00:05:19.146Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"815-980","title":"Regulated Operations","topic_title":"Derivatives and 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retrieval timestamps"}},{"number":"350-20","title":"Goodwill","topic_title":"Intangibles—Goodwill and Other","score":0.7289,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7a38511a1dca841f20591e7d0cffd9a13a6a5e5454ddde5f7ec73c40347529fb","downloaded_from":"2026-09-10T00:00:39.885Z","last_downloaded_at":"2026-09-10T00:01:29.561Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"350-10","title":"Overall","topic_title":"Intangibles—Goodwill and 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