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characterization of expenditures for regulatory accounting and
financial reporting purposes. The PRA simply allowed petitioner
to characterize a set percentage of expenditures as repair
expenses for tax purposes.
Petitioner is now trying to recharacterize as repairs, items
that it characterized as capital expenditures for tax purposes.
Petitioner cannot recharacterize amounts capitalized under the
PRA because to do so would violate the percentage limitation.
Petitioner does not identify any adjustments in the PRA or claim
that it made any error in the original computation under the PRA.
The expenditures that petitioner is trying to recharacterize are
those that petitioner consistently capitalized for regulatory,
financial, and tax reporting purposes. This attempted
recharacterization conflicts with petitioner’s practice of having
tax accounting follow regulatory and financial accounting.
B. Storm Reserve
On its original 1992 tax return, petitioner made a Schedule
M-1 adjustment of $6 million for a storm reserve related to
Florida Power. The storm reserve related to an extraordinary
item; namely, to offset damages caused by Hurricane Andrew. This
was not a recurring item which petitioner accounted for every
year, as evidenced by the absence of any Schedule M-1 adjustment
for a storm reserve for any of the other years in issue.
Additionally, petitioner has not claimed that it is seeking to
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