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UTILITY FINANCE & ACCOUNTING FOR
THE NON-FINANCIAL PROFESSIONAL
Further detail on each topic is shown by the subtopics within
each of the outline topics.
DAY ONE 8:00-4:00
Subtopic
Introduction
Basic Accounting Concepts
Balance Sheet
Regulatory Assets and when to
Income Statement remove them
Regulatory Assets Stranded
Costs and methods of
Stranded Costs recovery
Plant Impairment & write downs
needed
Financial Statement Analysis
Return on
Equity Measuring Shareholder
Value
Return to Common created
Why Book Value & Market Value
diverge
more in a non-regulated
companies
Difference between Shareholder
Value and ROE
The Utility’s Four Sets of
“Books”
Financial Reporting-GAAP
Reg vs nonregulated accounting
Income Tax Accounting under GAAP,
FAS 71 and FAS 101
Managerial Accounting
Financial implications of alternative
Rate Regulation
forms of regulation
DAY TWO 8:00-4:00
Accounting for Utility Plant
Straight Line
Depreciation Capitalization & Expense
Policy
Accelerated Depreciation
implications for ratemaking
Capitalization Versus Expense
Methods of Capitalizing
Going off of FAS 71 – examples
more or less
Which is better for the
utility
Taxes
Timing
Differences Regulatory Asset
for Flow
Deferred Taxes (Normalization) Through of
tax/book temporary
differences-a stranded cost
Cost of Capital
Weighted Average Cost
of How to measure cost of money
Capital
Discounted
Cash Flow Method
Risk
Premium Approach
Cost of Capital Case
DAY THREE 8:00-3:00
Present Value
Present Value Exercise
Example of Decommissioning
Shareholder Value
Free Cash
Flow How to make
decisions from
Income vs Shareholder
Shareholder viewpoint not
value
maximization ratepayer
Risk Considerations Why
Present Value of revenue
How to Make Decisions
requirements is not to be used
for competitive products
Risk & Return in a competitive
world
Capital Budgeting
Cash Flow
Analysis How shareholders’
& ratepayers’
Which Discount Rate to Use
interest may diverge in capital
Creating Shareholder Value
budgeting
Capital Budgeting Case
Conclusions
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