Whether those assets have been impaired shall be judged in the same manner as for entities in general. The net effect of the adjustments required by this Subtopic shall be included in income of the period in which the discontinuation occurs and shall be classified separately in income from continuing operations as an unusual or infrequently occurring item.
Examples illustrating the discontinuation of regulatory operations guidance include the following:
- a
Example 1 (see paragraph
980-20-55-1) illustrates assets recorded based solely on expected future revenue from the regulator.
- b
Example 2 (see paragraph
980-20-55-6) illustrates liabilities recorded based solely on actions of the regulator.
- c
Example 3 (see paragraph
980-20-55-10) illustrates assets recorded for deferred income taxes not previously recognized for rate-making purposes but expected to be in the future.
When deregulatory legislation is passed or when a rate order (whichever is necessary to effect change in the jurisdiction) that contains sufficient detail for the entity to reasonably determine how the transition plan will affect a separable portion of its business whose pricing is being deregulated is issued, the entity shall stop applying this Topic to that separable portion of its business. It has not been established whether an entity shall stop applying the accounting and reporting for regulatory operations as provided in the other Subtopics of this Topic to that separable portion of its business before the issuance of sufficiently detailed deregulatory legislation or a sufficiently detailed rate order.