# ASC 605-980-30: Revenue Recognition — Regulated Operations — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/605/980/#30-initial-measurement)

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## ASC 605-980-30: 30 Initial Measurement

[Read section](https://asc.understandingaccounting.org/asc/605/980/#30-initial-measurement)

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#### Alternative Revenue Programs—Revenue Collected Subject to Refund

##### [605-980-30-1](https://asc.understandingaccounting.org/asc/605/980/#605-980-30-1)

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In some cases, a regulated entity is permitted to bill requested rate increases before the regulator has ruled on the request.

##### [605-980-30-2](https://asc.understandingaccounting.org/asc/605/980/#605-980-30-2)

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When the revenue is originally recorded, the criteria in paragraph [450-20-25-2](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-2) shall determine whether a provision for estimated refunds shall be accrued as a loss contingency. The inability to make a reasonable estimate of the amount of the obligation at the time of sale because of significant uncertainty about possible claims precludes accrual and, if the range of possible loss is wide, may raise a question about whether revenue should be recognized. Similarly, if the range of possible refund is wide and the amount of the refund cannot be reasonably estimated, there may be a question about whether it would be misleading to recognize the provisional revenue increase as income.