# ASC 980-20-55: Regulated Operations — Discontinuation of Rate-Regulated Accounting — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/980/20/#55-implementation-guidance-and-illustrations) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:b4d4447bbba372a32801367668b7b050770e546018f15d629fb7ee1dd1904613 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/980/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [980-20-55-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:cd5cfbce8090cb2d79bceb3a2ccb13fb11836aeccfbcfee76e850b9b4ca4c88e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-20-40-1 through 40-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-1) . ##### [980-20-55-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:e626e68b01d919cce8165eb5d46107fdd32f3cca3ba44e130830b1fa2f2028e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility A operates solely in one regulatory jurisdiction. At December 31, 19X1, Utility A concludes, based on current market conditions, that it no longer meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for the application of the Regulated Operations Topic. Utility A's statement of financial position at December 31, 19X1, includes all of the following items: 1. a Deferred purchased power costs (costs of power used for operations in prior periods that were expected to be recovered from customers as a result of an automatic adjustment clause) 2. b Deferred costs of abandoned plant (costs for which recovery was being provided through rates) 3. c Deferred costs of repairing storm damage. ##### [980-20-55-3](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:aec88cb924a7d838be2eaa136a4d07cc242f78121f79771c15af6f3984862a7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Those items should be reported as follows as of December 31, 19X1. ##### [980-20-55-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:e8c6096dc5fb7ff8176e3d52a46135dffe64ef3551221d583727a678ed4863b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of those items should be eliminated from the entity's statement of financial position when it ceases to apply this Topic. The resulting charge to income should be reported as an unusual or infrequently occurring item in the period that includes December 31, 19X1. The entity should no longer defer those costs and report them as assets because they could not be reported as assets by entities in general. Entities in general would report a receivable for those items only if a right to receive payment exists as a result of past events or transactions and regardless of future transactions (such as future sales). ##### [980-20-55-5](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:6611b8022aec5f2199b6610497f5aa5e8ab2be343d5c81001a4f2c9032ff66f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a contract between a supplier and a customer for the sale of fuel oil may specify that next year's sales price will be adjusted based on the supplier's current-year cost of fuel oil. Even though it is probable that a future economic benefit (the ability to charge a higher price in the future) will result from the supplier's current-year cost of fuel oil, no asset exists at the end of the current year because the transactions (sales to the customer) that give the supplier control of the benefit are in the future. However, if the contract provides that the customer is obligated to pay additional amounts related to past purchases and regardless of future purchases, the supplier has an asset and it does not matter whether that payment is made in a single amount or when the customer will pay for next year's purchases. ##### [980-20-55-6](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:6e845d62ee52b81e1fcc8332e609c5ad2353b327981506f4bb70f90dd0fe608f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-20-40-1 through 40-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-1) . ##### [980-20-55-7](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:feba6f98a8ee99ba965cdb1de3cca4bfb322cc2ea951b3dbb3169bed8c6abda7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility B operates in two regulatory jurisdictions, State 1 and State 2; 40 percent of Utility B's operations are located in State 1 and 60 percent in State 2; system-wide assets, liabilities, and certain gains and losses are allocated 40 percent to State 1 and 60 percent to State 2. At December 31, 19X2, Utility B concludes, based on current and expected future market conditions in State 1, that it no longer meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic to its operations in State 1. No similar conditions exist in State 2, and actions of State 1's regulators are not expected to influence the decisions of regulators in State 2. Utility B's statement of financial position at December 31, 19X2, includes the following items. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8BD8BED6-66E8-4F19-B1B7-A9CE2573DE69-low.gif) "Deferred gain on restructuring debt, being amortized for rate-making purposes on an allocated basis by both states" " $50,000 " "Revenues collected subject to refund in prior years in State 1, expected to be refunded through future rates" " $75,000 " ##### [980-20-55-8](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:2aac0eb4f61c22e21a60770d6bdcc3ea40f489eeb10e6a66e357c21c621f52a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Those items should be reported as follows as of December 31, 19X2. ##### [980-20-55-9](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:5840228c898db164dc0b874974036c886a30c7b8b10c0f9290d7468be31e3ca3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the deferred gain allocable to State 1 (determined in this Example to be 40 percent of $50,000, or $20,000) should be eliminated from the entity's statement of financial position when it ceases to apply this Topic to its operations in State 1. No adjustment should be made for the deferred gain applicable to State 2. The regulatory-created accrual for revenues subject to refund in State 1 should be eliminated. Whether any liability related thereto exists should be determined under generally accepted accounting principles (GAAP) for entities in general. For example, amounts that were collected in the current or prior periods for which refunds will be made regardless of future sales should continue to be reported as liabilities after application of this Topic is discontinued. The credit to income resulting from the above adjustments should be reported as an unusual or infrequently occurring item in the period that includes December 31, 19X2. ##### [980-20-55-10](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:0cf81dece7e0b35fb6d697a5f11db42b82419cdc1a62624f95a04ce1cb788d55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [980-20-40-1 through 40-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-1) . ##### [980-20-55-11](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:21fbc2416e79ea83793cb0ac9fa54d7924a02938338f898b55c31a1278f1e312 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility C operates solely in one regulatory jurisdiction. At June 30, 19X3, Utility C concludes, based on new legislation, that it no longer meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic . Utility C had adopted Subtopic 740-10 in 19X2 and because of applying this Topic had recorded a regulatory-created asset of $650,000 for deferred taxes resulting from temporary differences that had not been recognized in the rate-making process but that were expected to be recovered in the future. ##### [980-20-55-12](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:b05a7a2358b18c746bd5c3c48906736c015e31f1c52eb47484f7007e2fe22e74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following reporting is required for that regulatory-created asset. ##### [980-20-55-13](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:11.043Z to 2026-09-10T02:28:11.043Z Record version: sha256:6c4825a8bbe2a4ab430a1a14e3d24b8afcf11a97eddc16d58d0989c22412ece9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Utility C should eliminate that regulatory-created asset from its statement of financial position when the entity ceases to apply this Topic. The charge to income should be reported as an unusual or infrequently occurring item in the period that includes June 30, 19X3.