A Guide To Improving Financial Information and Energy Trading Disclosure for the Electric Industry

Electric Company Members:  print $50.00; PDF  free  Associate Members:  $50.00 List:  $100.00 Formats:  Available as both a print publication or a PDF file Publication Date: 2003 Item #630301 (print)  Item #630302 (PDF) Note: As a PDF file, this publication is for use at a single site only. Please call (202) 508-5005 for corporate site pricing or if the PDF is to be used on a company Intranet.

A number of events over the past year have created a serious crisis in investor confidence throughout the nation's economy - but more concentrated in select industries including electricity. As a result of the crisis, broad market uncertainty has made clear the urgent need to make noticeable progress towards enhanced financial information disclosures.

In response, EEI commissioned Deloitte and Touche LLP to develop certain guidelines for disclosure in "Management's Discussion and Analysis of Financial Condition and Results of Operations" (MD&A) in collaboration with several participating groups consisting of accounting and financial representatives from EEI member companies.

This study provides a framework to capture the major areas where improved transparency has either been proposed by regulatory authorities or requested by the financial community.

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The content of the study is designed to address specific financial disclosure found in a company's MD&A. Examples are given of current disclosure which represents a compilation of existing disclosures, enhanced in some situations to reflect components of proposed rulemakings issued by the Securities & Exchange Commission. The study addresses the following disclosures:

Critical Accounting Policies

• Asset Impairment, Including Goodwill and Other Intangible Assets
• Regulatory Accounting Policies
• Environmental Contingencies
• Litigation Contingencies
• Defined Benefit Pension Plans and Other Post-retirement Benefit Plans
• Cost Capitalization Policies
• Depreciation Expense
• Energy Trading and Other Related Risk Management
• Decommissioning
• Asset Retirement Obligations
• Self Insurance
• Revenue Recognition  

Off-Balance Sheet Arrangements

• Unique Ownership Arrangements
• Guarantees and Other Assurances
• Synthetic Leases
• Related Parties
   

© 2008 Edison Electric Institute