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Electric Utility Companies Report Expectations on SFAS 143
Martha A. Fasci, The University of Texas at San Antonio
David Ramirez, Valero Energy Corporation
Veronda F. Willis, The University of Texas at San Antonio
ABSTRACT. This study investigates the effects of SFAS 143 on electric utility companies by asking the 74 members of the Edison Electric Institute to report their consensus with the specifications of SFAS 143, their selection of measurement for Asset Retirement Obligations (AROs), their approach for financial statement accounts in implementing SFAS 143, and their comments to identify issues with SFAS 143. Thirty-six companies responded for a 48.6% response rate. Overall, the respondents disagree that SFAS 143 improves financial reporting by providing users with uniform guidelines. Respondents agree with the classification of accretion expense, with the procedure to determine its base, with the procedure for changing the carrying amount of the ARO, and agree that the statement addresses expected present value to the fullest extent. The research also identifies important issues that may require further review by FASB.
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