# ASC 835-980-30: Interest — Regulated Operations — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

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## ASC 835-980-30: 30 Initial Measurement

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##### [835-980-30-1](https://asc.understandingaccounting.org/asc/835/980/#835-980-30-1)

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If a regulator requires an entity to capitalize certain costs as discussed in paragraph [980-835-25-1](https://asc.understandingaccounting.org/asc/835/980/#835-980-25-1), a computed interest cost and a designated cost of equity funds are capitalized, and net income for the current period is increased by a corresponding amount. In such cases, the amounts capitalized for rate-making purposes as part of the cost of acquiring the assets shall be capitalized for financial reporting purposes instead of the amount of interest that would be capitalized in accordance with Subtopic 835-20. Those amounts shall be capitalized only if their subsequent inclusion in [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 is probable.