Abolition of the Capitalization of Borrowing Interest in Asset Acquisition Costs Following the Removal of Wholesale Regulation
First written in FY2017-Q2. 3 of 4 entries say "Restated". Latest entry: FY2022.
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- FY2022RestatedAnnual report
「The Company had capitalized interest on funds used to construct electric utility property, plant and equipment in the construction cost of the relevant assets in accordance with the Electricity Business Accounting Regulations (MITI Ordinance No. 57 of 1965), but from the current consolidated fiscal year has changed to a method that does not capitalize such interest in the construction cost of the relevant assets.」
The elimination of capitalizing borrowing interest in asset acquisition costs following the abolition of wholesale regulation continues to be applied as an accounting policy. - FY2017RestatedAnnual report
「The Company had capitalized interest on funds used to construct electric utility property, plant and equipment in the construction cost of the relevant assets in accordance with the Electricity Business Accounting Regulations (MITI Ordinance No. 57 of 1965), but from the current consolidated fiscal year has changed to a method that does not capitalize such interest in the construction cost of the relevant assets.」
The elimination of capitalizing borrowing interest in asset acquisition costs following the abolition of wholesale regulation continues to be applied as an accounting policy in the current consolidated fiscal year. - FY2017-Q3RestatedAnnual report
「The Company had capitalized interest on funds used to construct electric utility property, plant and equipment in the construction cost of the relevant assets in accordance with the Electricity Business Accounting Regulations (MITI Ordinance No. 57 of 1965), but from the first quarter of the current consolidated fiscal year has changed to a method that does not capitalize such interest in the construction cost of the relevant assets.」
The elimination of capitalizing borrowing interest in asset acquisition costs following the abolition of wholesale regulation continues to be applied as a change in accounting policy. - FY2017-Q2First statedAnnual report
「The Company had capitalized interest on funds used to construct electric utility property, plant and equipment in the construction cost of the relevant assets in accordance with the Electricity Business Accounting Regulations (MITI Ordinance No. 57 of 1965). From the first quarter of the current consolidated fiscal year, however, the Company has changed to a method that does not capitalize such interest in the construction cost of the relevant assets. Previously, the Company had adopted a cost-based approach under which electricity charges for the wholesale electricity business were calculated by adding a business return to the reasonable costs assumed to be necessary. The abolition of wholesale regulation in April 2016 eliminated the regulatory framework for charges based on this cost-based approach. In response, the Company changed its accounting policy to appropriately reflect in electric utility property, plant and equipment and construction in progress the impact of the loss of the institutional basis for imposing on future beneficiaries the burden of interest previously capitalized in construction costs.」
Following the abolition of charge regulation resulting from the removal of wholesale regulation, the Company changed its method from the first quarter onward so that borrowing interest on construction funds is not capitalized in the construction cost of electric utility property, plant and equipment and other assets.