# ASC 605-980-25: Revenue Recognition — Regulated Operations — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/605/980/#25-recognition) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:ebabee9259511eb355632048b70807e6b578e1cd95b257254c0451cf8e5340a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 605-980-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/605/980/#25-recognition) SEC content: no #### Alternative Revenue Programs ##### [605-980-25-1](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:29bec02a77fd0881ed6a82768182eb30929ec2d455ed7bf6c58d34073c687cac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Traditionally, regulated utilities whose rates are determined based on cost of service invoice their customers by applying approved base rates (designed to recover the utility's [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.") including a return on shareholders' investment) to usage. Some regulators of utilities have also authorized the use of additional, alternative revenue programs. The major alternative revenue programs currently used can generally be segregated into two categories, Type A and Type B. ##### [605-980-25-2](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:3b99256b9a416bf60a65d8520ff0779873bfda0cbfe7b85f321184dc20f4e8f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Type A programs adjust billings for the effects of weather abnormalities or broad external factors or to compensate the utility for demand-side management initiatives (for example, no-growth plans and similar conservation efforts). Type B programs provide for additional billings (incentive awards) if the utility achieves certain objectives, such as reducing costs, reaching specified milestones, or demonstratively improving customer service. ##### [605-980-25-3](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:e3c2d43ab32f526c0af48c9ceed18c5bd8d9906b743d20413212e595a3da888b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Both types of programs enable the utility to adjust rates in the future (usually as a surcharge applied to future billings) in response to past activities or completed events. ##### [605-980-25-4](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:4b7ff3f28c160d2651c81d8c030ac451387c804e6a66a1a65ff1f0160a1f0352 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once the specific events permitting billing of the additional revenues under Type A and Type B programs have been completed, the regulated utility shall recognize the additional revenues if all of the following conditions are met: 1. a The program is established by an order from the utility's regulatory commission that allows for automatic adjustment of future rates. Verification of the adjustment to future rates by the regulator would not preclude the adjustment from being considered automatic. 2. b The amount of additional revenues for the period is objectively determinable and is probable of recovery. 3. c The additional revenues will be collected within 24 months following the end of the annual period in which they are recognized. ##### [605-980-25-5](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:0bba470eb035301947ad03ac0f86cbe1b0fb5d1b75e366823d86211d8f694486 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-980-25-6](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:e05b8fe70d07492e76ae85dad4a5474b68926863ff3e5e7d5285ec820a8e12fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-980-25-7](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:0c873905458169656f70b43b839370cb52f6229945d53c5bb4d520e9bd7b22c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-980-25-8](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:28d8e5bf2547ec0254471848ee9e710a25e8a4e1f0f7585a2de04276ce762c85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-980-25-9](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:7a70b0d2c81e6a55716b49b4974a7957c1219d4927c6cb3a45eb94ee83a64ea3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2014-09](https://asc.understandingaccounting.org/updates/asu-2014-09/). ##### [605-980-25-10](https://asc.understandingaccounting.org/asc/605/980/#605-980-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:53:55.847Z to 2026-09-10T00:53:55.847Z Record version: sha256:3f0e2348b29a5a8028b70be29b50bfeed592010415c1da0d9e0a03cf639de833 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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