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reporting purposes cannot be ignored. See Commissioner v. Idaho
Power Co., supra at 14-15. In that case, the Supreme Court
stated:
Some, although not controlling, weight must be
given to the fact that the Federal Power Commission and
the Idaho Public Utilities Commission required the
taxpayer to use accounting procedures that capitalized
construction-related depreciation. Although agency-
imposed compulsory accounting practices do not
necessarily dictate tax consequences, they are not
irrelevant and may be accorded some significance. * * *
where a taxpayer’s generally accepted method of
accounting is made compulsory by the regulatory agency
and that method clearly reflects income, it is almost
presumptively controlling of federal income tax
consequences. [Id. at 14-15; citations and fn. ref.
omitted.]
For regulatory accounting and financial reporting purposes,
Florida Power followed regulatory rules and guidelines to
determine the characterization of expenditures related to its
electric plants. The fact that the regulatory accounting
requirements allowed Florida Power some flexibility in defining
retirement units does not change this. The retirement units used
by Florida Power for FPSC purposes did not exceed the limits
prescribed by the FERC for the years in issue, and petitioner
acknowledges that its characterization of expenditures for FPSC
purposes “automatically conformed with FERC regulatory accounting
principles.” The FERC prohibited public utilities from
condensing the FERC list of retirement units or from adding any
retirement units that exceeded the size of the FERC retirement
units. Once a retirement unit was established, the cost of
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