Regulatory Asset
Specific costs or revenues that a regulatory agency permits a U.S. public utility (usually an energy company) to defer to its balance sheet. These amounts would otherwise be required to appear on the company's income statement and would be charged against current expenses or revenues. Investopedia Says:
The accounting methods used to disclose regulatory assets may cause differences in how an electric utility company's financial condition is reported. For example, under U.K. GAAP, these assets are currently recorded on the balance sheet.
Under recently developed International Financial Reporting Standards, regulatory assets are not permitted to be recognized on the balance sheet. Instead, costs will be charged to the income statement when incurred, and recoveries from customers will be recognized when receivable. Related Terms:
Asset
Balance Sheet
Current Assets
Generally Accepted Accounting Principles - GAAP
Income Statement
International Accounting Standards - IAS
International Financial Reporting Standards - IFRS
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