# ASC 980-20: Regulated Operations — Discontinuation of Rate-Regulated Accounting Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/980/20/) 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): 2026-09-10T02:27:47.191Z to 2026-09-10T02:28:14.273Z Record version: sha256:a0c81f44bbe4a3e1b15c5908ed0a1e839a58c2f443ae796c14536834f657964a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20: Regulated Operations — Discontinuation of Rate-Regulated Accounting ### Machine-generated study aids ```json { "summary": "ASC 980-20 governs what happens when an entity's operations (or a separable portion of them) stop meeting the criteria in 980-10-15-2 for rate-regulated accounting — because of deregulation, a shift away from cost-based rate-making, or competition/rate resistance. On discontinuation, the entity eliminates from its balance sheet all regulatory assets and liabilities that entities in general could not recognize, but does not adjust the carrying amounts of plant, equipment, and inventory unless impaired under Subtopic 360-10. The net adjustment goes to income of the period of discontinuation, classified separately within income from continuing operations as an unusual or infrequently occurring item.", "key_points": [ "An entity must discontinue applying Topic 980 to operations in a regulatory jurisdiction (or to a separable portion, such as a customer class) that no longer meet the criteria of 980-10-15-2; discontinuation for a separable portion creates a rebuttable presumption that Topic 980 should be discontinued for all operations in that jurisdiction (980-20-40-1).", "Upon discontinuation the entity eliminates the effects of regulator actions recognized as assets and liabilities that entities in general would not recognize, and the Impairment or Disposal of Long-Lived Assets Subsections of 360-10 apply except for the income statement reporting in 360-10-45-4 and 360-10-50-2 (980-20-40-2).", "Carrying amounts of plant, equipment, and inventory are not adjusted unless impaired, judged in the same manner as for entities in general (980-20-35-2; 980-20-40-2; 980-20-40-4).", "Amounts included in or netted against plant, equipment, or inventory that entities in general could not include — other than allowance for funds used during construction, intra-entity profit, and disallowances of recently completed plant costs (e.g., postconstruction operating costs capitalized under 980-340-25-1, or cumulative depreciation differences) — must be separated and accounted for as effects of regulator actions (980-20-35-3 through 35-5; 980-20-40-3).", "The net effect of the required adjustments is included in income of the period of discontinuation and classified separately in income from continuing operations as an unusual or infrequently occurring item (980-20-40-4).", "Under the source-of-cash-flow approach, regulatory assets and liabilities originating in the deregulated separable portion are not eliminated if deregulatory legislation or a rate order provides regulated cash flows from a still-regulated separable portion; they are carried in that other portion until recovered/settled, individually impaired or eliminated by the regulator, or that portion ceases to meet 980-10-15-2 (980-20-35-6 through 35-9).", "Disclosure: the entity must disclose the reasons for discontinuation and identify the affected portion of operations (980-20-50-1), apply Subtopic 220-20 disclosures to the net adjustment (980-20-50-2), and segregate amounts relating to the deregulated separable portion by display or note (980-20-45-1)." ], "categories": [ "Industry-specific", "Derecognition", "Impairment", "Disclosure" ], "audience_level": "intermediate", "student_note": "The classic exam trap is assuming discontinuation writes down everything: regulatory assets/liabilities are eliminated, but plant, equipment, and inventory keep their Topic 980 carrying amounts (including AFUDC) unless separately impaired under 360-10. Also remember the write-off is an unusual/infrequent item inside continuing operations, not an extraordinary item or a restatement.", "related_topics": [ "980-10", "980-340", "360-10", "220-20", "740-10", "980-405" ], "key_concepts": [ "discontinuation of rate-regulated accounting", "regulatory assets and liabilities", "separable portion of operations", "deregulation", "cost-based rate-making", "unusual or infrequently occurring item", "source of cash flow approach", "impairment of plant and equipment" ] } ``` Source downloaded (UTC): 2026-09-10T02:27:47.191Z to 2026-09-10T02:27:47.191Z Record version: sha256:0b85f030417e893b3d45dd34a6b8215d98533d16cc805731face61477442f8ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/980/20/#00-status) SEC content: no ##### [980-20-00-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:47.191Z to 2026-09-10T02:27:47.191Z Record version: sha256:7fc500e7ae0de9f422e4ea8e1b540a7dc9b1631ea7b21c51e4e7e4d4e0a65591 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
980-20-40-4AmendedAccounting Standards Update No. 2015-0101/09/2015
980-20-45-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
980-20-50-2AmendedMaintenance Update 2017-19 (PDF)11/15/2017
980-20-50-2AmendedAccounting Standards Update No. 2015-0101/09/2015
980-20-55-4AmendedAccounting Standards Update No. 2015-0101/09/2015
980-20-55-9AmendedAccounting Standards Update No. 2015-0101/09/2015
980-20-55-13AmendedAccounting Standards Update No. 2015-0101/09/2015
Source downloaded (UTC): 2026-09-10T02:27:49.431Z to 2026-09-10T02:27:49.431Z Record version: sha256:1cbc1de6d8147f46c1545d404e981df8858cdfcc48c82a0a200f5c374af262be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/980/20/#05-overview-and-background) SEC content: no ##### [980-20-05-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:49.431Z to 2026-09-10T02:27:49.431Z Record version: sha256:b5521b1917af0c4bf3c9e4e3b9d2683d58574f433f6b4ca07850ab4188750c58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses the discontinuation of rate-regulated accounting when an entity no longer meets the criteria in paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2). ##### [980-20-05-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:49.431Z to 2026-09-10T02:27:49.431Z Record version: sha256:ca3f50c5f3c55fd525d9c5c15f7dcd0f87292959f1887f59cc070a18776b2b07 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Deregulation of certain industries and changes in the method of regulating others have caused several entities to discontinue application of this Topic for some or all of their operations. Source downloaded (UTC): 2026-09-10T02:27:53.312Z to 2026-09-10T02:27:53.312Z Record version: sha256:0b716c0a6fc421b123fd9468fd0f0b046c3617e8ec003da21f4eb4a3ae91f9b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/980/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [980-20-15-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:53.312Z to 2026-09-10T02:27:53.312Z Record version: sha256:fd53711f03fe90b05f80544faa60cf386a100cb7f58f5d3a2d203fdd6db222f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15, with specific exceptions as noted below, which provides further guidance on an entity's operations that no longer meet the criteria of regulated operations. #### Entities ##### [980-20-15-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:53.312Z to 2026-09-10T02:27:53.312Z Record version: sha256:afda2117b8a0a3deec0b448287cbf4b1562732dbf267843ac66384b503c453a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Failure of an entity's operations to continue to meet the criteria in paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) can result from different causes. Examples include the following: 1. a Deregulation 2. b A change in the regulator's approach to setting rates from cost-based rate-making to another form of regulation 3. c Increasing competition that limits the entity's ability to sell utility services or products at rates that will recover costs (as used in paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2)) 4. d Regulatory actions resulting from resistance to rate increases that limit the entity's ability to sell utility services or products at rates that will recover costs if the entity is unable to obtain (or chooses not to seek) relief from prior regulatory actions through appeals to the regulator or the courts. ##### [980-20-15-3](https://asc.understandingaccounting.org/asc/980/20/#980-20-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:53.312Z to 2026-09-10T02:27:53.312Z Record version: sha256:9d236c4db91de9b7523e3a0217bbbd4604b267713330ab3e8ef134800c27c1e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Regardless of the reason for an entity's discontinuation of application of the Regulated Operations Topic, this Subtopic specifies how that discontinuation shall be reported in the entity's general-purpose external financial statements. Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:ee4f0f8bb1ab0e581e4b8fbf4b5ef0a32a6dc3ddcfea9cbc7d6b8fcad394f26a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/980/20/#35-subsequent-measurement) SEC content: no #### Discontinuation of Recognition Following Regulator Actions ##### [980-20-35-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:ce6c151ec6c4268e465dc9e676fe3b1f4baaab953702c1bd2cf754a1dda9c08f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Plant, Equipment, and Inventory ##### [980-20-35-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:9ab7cefb38cd6f6513d98b42bc9ef1146f916ee64afb397cf1be794574258a0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [980-20-35-3](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:34ff059b50ea10d2ac6291105d98586957d457914d5a29ae43686322772d965c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/a/#allowance-for-funds-used-during-construction "The cost of financing construction as financed partially by borrowings and partially by equity, capitalized as part of the cost of plant and equipment pursuant to requirements of the regulator."), 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. ##### [980-20-35-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:5ee80bc3984bcc884949663c461f870bcded476054c86bde43ab17e661cd09f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, postconstruction operating costs that were capitalized pursuant to paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) 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. ##### [980-20-35-5](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:264639160e98a09c3b78674c7ae7d42c6b350f0538ba1a23ff2b253651c91874 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Regulatory Assets and Liabilities Originating in a Separable Portion of the Entity ##### [980-20-35-6](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:d9d9dba725bab59bbed91370c7274158be1f32eed941f846b50266a5c9b5bc0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [regulatory assets and regulatory liabilities](https://asc.understandingaccounting.org/glossary/r/#regulatory-assets-and-regulatory-liabilities "Regulatory assets and regulatory liabilities are those assets and liabilities recognized pursuant to the provisions of paragraphs 980-340-25-1 and 980-405-25-1. These assets and liabilities are not recognized by entities in general.") 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](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic. ##### [980-20-35-7](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:ec72ce689aaa005bce9141bd7657a9986a573d7ef92d33bb96d26d4fe2ee99f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic. ##### [980-20-35-8](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:055df79426d9ec8a85b26eae3064aeb802e3b71215184f82e35ce434ae6997dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The source of the cash flow approach adopted in paragraphs [980-20-35-6 through 35-9](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-6) 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). ##### [980-20-35-9](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:27:58.021Z to 2026-09-10T02:27:58.021Z Record version: sha256:d83d55d3c379a08ff15aec9e33e077765b2225a43fa445fcd7c827c341a0a000 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/980/20/#980-20-35-6) . 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](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic. Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:fcd672857e34244fd8e6024aabd788445c4a3cf06c6bf74fd90a2d1c2e02ad21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-40: 40 Derecognition [Read section](https://asc.understandingaccounting.org/asc/980/20/#40-derecognition) SEC content: no #### Discontinuation of Regulatory Operations Guidance ##### [980-20-40-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:ddc68695fb0ac1417a73ed67e5a2104d86b7c0a4ff0150e606c3a60568c96343 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an entity determines that its operations in a regulatory jurisdiction no longer meet the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of the Regulated Operations Topic, that entity shall discontinue application of this Topic to its operations in that jurisdiction. If a separable portion of the entity's operations within a regulatory jurisdiction ceases to meet the criteria of that paragraph for application of this Topic, application of this Topic to that separable portion shall be discontinued. That situation creates a presumption that application of this Topic shall be discontinued for all of the entity's operations within that regulatory jurisdiction. That presumption can be overcome by establishing that the entity's other operations within that jurisdiction continue to meet the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for application of this Topic. The separable portion may be an entity's operations within a regulatory jurisdiction or a smaller portion (such as a customer class within a regulatory jurisdiction), either of which could require the allocation of system-wide assets and liabilities. ##### [980-20-40-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:c8955d8dcf27d2b2e21b56c8e537fc75f50c361e67d261c595a8a171809a00a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an entity discontinues application of this Topic to all or part of its operations, that entity shall eliminate from its statement of financial position prepared for general-purpose external financial reporting the effects of any actions of regulators that had been recognized as assets and liabilities pursuant to this Topic but would not have been recognized as assets and liabilities by entities in general, and the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 shall apply, except for the provisions for income statement reporting in paragraphs [360-10-45-4](https://asc.understandingaccounting.org/asc/360/10/#360-10-45-4) and [360-10-50-2](https://asc.understandingaccounting.org/asc/360/10/#360-10-50-2). However, the carrying amounts of plant, equipment, and inventory measured and reported pursuant to this Topic shall not be adjusted unless those assets are impaired, in which case the carrying amounts of those assets shall be reduced to reflect that impairment. ##### [980-20-40-3](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:1ae8bd207ffd7607cd4440711b16ff2857179b2543a6d7acb8edd339c97e1720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/a/#allowance-for-funds-used-during-construction "The cost of financing construction as financed partially by borrowings and partially by equity, capitalized as part of the cost of plant and equipment pursuant to requirements of the regulator."), 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 (such as postconstruction operating costs capitalized pursuant to paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1)) are included in or netted against the carrying amounts of plant, equipment, or inventory, those amounts shall be accounted for as this Subtopic prescribes for the effects of actions of a regulator. ##### [980-20-40-4](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:5ae44784de4830602882b64cb30ee5ccdca34a47123c501e5387361839e7b8eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [980-20-40-5](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:96e01ff306cb43df1587bef59763cbc37325aa3e946b19051b00a7d76b458fb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples illustrating the discontinuation of regulatory operations guidance include the following: 1. a Example 1 (see paragraph [980-20-55-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-1)) illustrates assets recorded based solely on expected future revenue from the regulator. 2. b Example 2 (see paragraph [980-20-55-6](https://asc.understandingaccounting.org/asc/980/20/#980-20-55-6)) illustrates liabilities recorded based solely on actions of the regulator. 3. c Example 3 (see paragraph [980-20-55-10](https://asc.understandingaccounting.org/asc/980/20/#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. #### Deregulatory Legislation or Rate Order in a Separable Portion of the Entity ##### [980-20-40-6](https://asc.understandingaccounting.org/asc/980/20/#980-20-40-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:01.063Z to 2026-09-10T02:28:01.063Z Record version: sha256:5160a0429c22ca18a5450b12f20d7db55cd5e15e8e14769f6759064dc158e664 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T02:28:04.697Z to 2026-09-10T02:28:04.697Z Record version: sha256:92dd4dab97577e2ac41b65b4c387e867c3ce514f763131b2707e5903bae0080c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/980/20/#45-other-presentation-matters) SEC content: no #### Separable Portion Following Discontinuation of Regulatory Operations Guidance ##### [980-20-45-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:04.697Z to 2026-09-10T02:28:04.697Z Record version: sha256:d574e7d5e2bebc736e1ee7e3d153f4f8ab19f731b4259bcb8610f528187eae69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once the Regulated Operations Topic is no longer applied to a separable portion of an entity's business, the financial statements shall segregate, via financial statement display or note disclosure, the amounts contained in the financial statements that relate to that separable portion. Source downloaded (UTC): 2026-09-10T02:28:08.750Z to 2026-09-10T02:28:08.750Z Record version: sha256:efc3805cae6c1344aa76433711b3af522c1bd2bf5ca950657ec6438a94a4ba42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 980-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/980/20/#50-disclosure) SEC content: no ##### [980-20-50-1](https://asc.understandingaccounting.org/asc/980/20/#980-20-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:08.750Z to 2026-09-10T02:28:08.750Z Record version: sha256:17879357b1eff55d2feaf0070fd7f544e9aaed06a54a0910e6af0ffa10f68b1f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the period in which an entity reflects the discontinuation of application of the Regulated Operations Topic all or a separable portion of its operations, the entity shall disclose the reasons for the discontinuation and identify the portion of its operations to which the application of this Topic is being discontinued. ##### [980-20-50-2](https://asc.understandingaccounting.org/asc/980/20/#980-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:28:08.750Z to 2026-09-10T02:28:08.750Z Record version: sha256:ffd10705b193b71b4d37ae3a5e9575bfd1b4b53da8e539edf723d8a01b8eaeef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosure requirements of Subtopic 220-20 for unusual or infrequently occurring items apply to the net adjustment reported in the statement of operations as a result of applying this Subtopic. 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.