{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/740/980/#25-recognition","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.","topic":"740","topic_title":"Income Taxes","subtopic":"740-980","subtopic_title":"Regulated Operations","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Income Taxes Applicable to Regulated Entities","paragraphs":[{"citation":"740-980-25-1","para":"25-1","html":"
For regulated entities that meet the criteria for application of paragraph 980-10-15-2, this Subtopic specifically:
  1. a
    Prohibits net-of-tax accounting and reporting
  2. b
    Requires recognition of a deferred tax liability for tax benefits that are flowed through to customers when temporary differences originate and for the equity component of the allowance for funds used during construction
  3. c
    Requires adjustment of a deferred tax liability or asset for an enacted change in tax laws or rates.
","snippet":"For regulated entities that meet the criteria for application of paragraph 980-10-15-2, this Subtopic specifically:\n(a) Prohibits net-of-tax accounting and reporting\n(b) Requires recognition of a deferred tax liability f…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f1824cdfbf4a81f51947f5e44170920c6ba881c6fb64ecec43d224e26b0237d","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}},{"citation":"740-980-25-2","para":"25-2","html":"
If, as a result of an action by a regulator, it is probable that the future increase or decrease in taxes payable for (b) and (c) in the preceding paragraph will be recovered from or returned to customers through future rates, an asset or liability shall be recognized for that probable future revenue or reduction in future revenue pursuant to paragraphs 980-340-25-1 and 980-405-25-1. That asset or liability also shall be a temporary difference for which a deferred tax liability or asset shall be recognized.
","snippet":"If, as a result of an action by a regulator, it is probable that the future increase or decrease in taxes payable for (b) and (c) in the preceding paragraph will be recovered from or returned to customers through future …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2995c1db8fb6f053f4f85e4a8aabe3134b2504477267638da1f2f569dd7ee3f0","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}},{"citation":"740-980-25-3","para":"25-3","html":"
Example 1 (see paragraph 980-740-55-8) illustrates recognition of an asset for the probable revenue to recover future income taxes.
","snippet":"Example 1 (see paragraph 980-740-55-8) illustrates recognition of an asset for the probable revenue to recover future income taxes.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e520474913ed8fc891ae32828b0e1e939d05dddff787ec92f57b2c57b3dc9e6c","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}},{"citation":"740-980-25-4","para":"25-4","html":"
Example 2 (see paragraph 980-740-55-13) illustrates adjustment of a deferred tax liability when the liability represents amounts already collected from customers.
","snippet":"Example 2 (see paragraph 980-740-55-13) illustrates adjustment of a deferred tax liability when the liability represents amounts already collected from customers.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:71170d522c60248dc382455d1baf6295bdbaa75adb1439567fe771ed9f11f3bb","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:572194330d75c64d0e1a0b21c56308c4eb6ea64e8a7e6fcdb470fbd0a7c34470","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:49b01d59145fe6b6b17dfe724e33d0b28c0b2dd0412a03f16c87416bb7021ba6","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:49b01d59145fe6b6b17dfe724e33d0b28c0b2dd0412a03f16c87416bb7021ba6","downloaded_from":"2026-09-10T01:21:48.440Z","last_downloaded_at":"2026-09-10T01:21:48.440Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479068","source_sha256":"fd114dd68623903caf70f8528a3546be289f68d2beb308acc8ea394748d311fe"}}