{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/980/20/#35-subsequent-measurement","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":"980","topic_title":"Regulated Operations","subtopic":"980-20","subtopic_title":"Discontinuation of Rate-Regulated Accounting","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Discontinuation of Recognition Following Regulator Actions","paragraphs":[{"citation":"980-20-35-1","para":"35-1","html":"
An entity that discontinues application of the Regulated Operations Topic shall no longer recognize the effects of actions of a regulator as assets or liabilities unless the right to receive payment or the obligation to pay exists as a result of past events or transactions and regardless of future transactions.
","snippet":"An entity that discontinues application of the Regulated Operations Topic shall no longer recognize the effects of actions of a regulator as assets or liabilities unless the right to receive payment or the obligation to …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ce6c151ec6c4268e465dc9e676fe3b1f4baaab953702c1bd2cf754a1dda9c08f","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:459c954c0348bf4cac73c73e989a936ff169f2418619c0065247820df58142db","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"block":null,"heading":"Plant, Equipment, and Inventory","paragraphs":[{"citation":"980-20-35-2","para":"35-2","html":"
This Subtopic requires that upon the discontinuation of rate-regulated accounting, the carrying amounts of the plant, equipment, and inventory measured and recorded pursuant to this Topic shall not be adjusted unless those assets are impaired.
","snippet":"This Subtopic requires that upon the discontinuation of rate-regulated accounting, the carrying amounts of the plant, equipment, and inventory measured and recorded pursuant to this Topic shall not be adjusted unless tho…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9ab7cefb38cd6f6513d98b42bc9ef1146f916ee64afb397cf1be794574258a0d","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-3","para":"35-3","html":"
The carrying amounts of plant, equipment, and inventory for entities applying this Topic differ from those for entities in general only because of the allowance for funds used during construction, intra-entity profit, and disallowances of costs of recently completed plants. If any other amounts that would not be includable in the carrying amounts of plant, equipment, or inventory by entities in general are included in or netted against the carrying amounts of plant, equipment, and inventory, those amounts shall be separated from the carrying amounts of plant, equipment, and inventory and accounted for as prescribed in this Subtopic.
","snippet":"The carrying amounts of plant, equipment, and inventory for entities applying this Topic differ from those for entities in general only because of the allowance for funds used during construction, intra-entity profit, an…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:34ff059b50ea10d2ac6291105d98586957d457914d5a29ae43686322772d965c","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-4","para":"35-4","html":"
For example, postconstruction operating costs that were capitalized pursuant to paragraph 980-340-25-1 represent the effects of actions of a regulator regardless of their classification in the financial statements and shall be accounted for as this Subtopic prescribes for the effects of actions of a regulator.
","snippet":"For example, postconstruction operating costs that were capitalized pursuant to paragraph 980-340-25-1 represent the effects of actions of a regulator regardless of their classification in the financial statements and sh…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5ee80bc3984bcc884949663c461f870bcded476054c86bde43ab17e661cd09f1","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-5","para":"35-5","html":"
Another example of the effect of actions of a regulator that would require adjustment is the cumulative difference, if any, between recorded depreciation and depreciation computed using a generally accepted method of depreciation.
","snippet":"Another example of the effect of actions of a regulator that would require adjustment is the cumulative difference, if any, between recorded depreciation and depreciation computed using a generally accepted method of dep…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:264639160e98a09c3b78674c7ae7d42c6b350f0538ba1a23ff2b253651c91874","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:98be28fdeacee61072312233dc23342bfc165b4bdb75f4a4d0cd4b9a766de5ac","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"block":null,"heading":"Regulatory Assets and Liabilities Originating in a Separable Portion of the Entity","paragraphs":[{"citation":"980-20-35-6","para":"35-6","html":"
The regulatory assets and regulatory liabilities that originate in a separable portion of an entity to which this Subtopic is applied shall be evaluated on the basis of where (that is, the portion of the business in which) the regulated cash flows to realize and settle them, respectively, will be derived. Regulated cash flows are from rates that are charged to customers and intended by regulators to be for the recovery of the specified regulatory assets and the settlement of regulatory liabilities. They are derived from a levy on rate-regulated goods or services provided by another separable portion of the entity that meets the criteria of paragraph 980-10-15-2 for application of this Topic.
","snippet":"The regulatory assets and regulatory liabilities that originate in a separable portion of an entity to which this Subtopic is applied shall be evaluated on the basis of where (that is, the portion of the business in whic…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d9d9dba725bab59bbed91370c7274158be1f32eed941f846b50266a5c9b5bc0f","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-7","para":"35-7","html":"
There is no elimination of the regulatory assets and regulatory liabilities that originate in the separable portion of the business to which this Subtopic is applied and for which the deregulatory legislation or rate order (whichever is necessary to effect change in the jurisdiction) specifies the collection of regulated cash flows until any of the following occur:
  1. a
    They are recovered by (in the case of assets) or settled through (in the case of liabilities) collection of regulated cash flows.
  2. b
    They are individually impaired (in the case of assets) or the regulator eliminates the obligation (in the case of liabilities) as specified by the provisions of this Topic.
  3. c
    The separable portion of the business from which the regulated cash flows are derived no longer meets the criteria of paragraph 980-10-15-2 for application of this Topic.
","snippet":"There is no elimination of the regulatory assets and regulatory liabilities that originate in the separable portion of the business to which this Subtopic is applied and for which the deregulatory legislation or rate ord…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ec72ce689aaa005bce9141bd7657a9986a573d7ef92d33bb96d26d4fe2ee99f3","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-8","para":"35-8","html":"
The source of the cash flow approach adopted in paragraphs
980-20-35-6 through 35-9
shall be used for recoveries of all costs and settlements of all obligations (not just for regulatory assets and regulatory liabilities that are recorded at the date this Subtopic is applied) for which regulated cash flows are specifically provided in the deregulatory legislation or rate order (whichever is necessary to effect change in the jurisdiction).
","snippet":"The source of the cash flow approach adopted in paragraphs 980-20-35-6 through 35-9 shall be used for recoveries of all costs and settlements of all obligations (not just for regulatory assets and regulatory liabilities …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:055df79426d9ec8a85b26eae3064aeb802e3b71215184f82e35ce434ae6997dc","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},{"citation":"980-20-35-9","para":"35-9","html":"
A cost or an obligation is recognized as a regulatory asset or a regulatory liability within the separable portion of the entity from which the regulated cash flows for its recovery or settlement, respectively, are derived once it meets both of the following conditions:
  1. a
    Expensed or incurred after this Subtopic is applied to the portion of the business where it originated (such as the loss on the sale of an electricity generating plant or the loss on the buy-out of a purchased power contract that is recognized after this Subtopic is applied to the generation portion of the business)
  2. b
    Specified for recovery or settlement in the deregulatory legislation or a rate order (whichever is necessary to effect change in the jurisdiction) and is recovered or settled in the same manner (that is, via regulated cash flows) as the regulatory assets and regulatory liabilities described in paragraphs
    980-20-35-6 through 35-9
    .
Those regulatory assets and regulatory liabilities shall be carried in this other separable portion of the business until they are collected or settled, until they are individually impaired (assets) or eliminated (liabilities), or until that separable portion of the business no longer meets the criteria of paragraph 980-10-15-2 for application of this Topic.
","snippet":"A cost or an obligation is recognized as a regulatory asset or a regulatory liability within the separable portion of the entity from which the regulated cash flows for its recovery or settlement, respectively, are deriv…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d83d55d3c379a08ff15aec9e33e077765b2225a43fa445fcd7c827c341a0a000","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9c1f878b3b0c82d4b7db9247d0e7830954e045c9c519c7c6b232237894869166","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ee4f0f8bb1ab0e581e4b8fbf4b5ef0a32a6dc3ddcfea9cbc7d6b8fcad394f26a","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ee4f0f8bb1ab0e581e4b8fbf4b5ef0a32a6dc3ddcfea9cbc7d6b8fcad394f26a","downloaded_from":"2026-09-10T02:27:58.021Z","last_downloaded_at":"2026-09-10T02:27:58.021Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147481891","source_sha256":"d13da30c889778b3a12f59709a68d0dc4a8f524d206b368d2ad389326600c501"}}