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Utility Entitled to Expense Item After Change in Federal law
Publication year - 1993
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1993.tb06018.x
Subject(s) - taxable income , accrual , revenue , commission , accounting , amortization , debt , business , actuarial science , finance , earnings
The Pennsylvania‐American Water Company (PAWC) filed a supplement to its approved tariff that was designed to increase annual revenue by about $21 million. In PAWC's petition, the question was presented as to whether a utility is entitled to an expense item for an increase in income taxes caused by a change in federal law that repealed the option of deducting bad debts from taxable income on the basis of a bad debt reserve accrual and declared the amounts listed in such reserves at the end of 1986 to be taxable income. The Public Utility Commission (PUC) had previously approved the amortization of such expenses, but in this case, it disallowed the expense. PAWC appealed, and the decision was reversed.