AER position paper accounting methodologies

The AER has released a position paper inviting comments from interested parties on two accounting approaches in relation to the recognition of the timing of capital expenditure in a transmission network service provider’s regulatory asset base.

The AER’s Statement of Regulatory Principles does not provide any guidance on this issue and the AER has previously provided flexibility in terms of an accounting approach that may be applied by the TNSP’s. The AER’s preliminary position based on an examination of the issues identified in the paper is to favour an “as-incurred” accounting approach that should be applied by all TNSP’s.