Do the adjustments to the deferred tax accounts for the implementation of SFAS 109 fall within this restriction?
Response: Yes. This letter however, will constitute the requisite authority for making adjustments to the deferred tax accounts when the application of SFAS 109 does not affect net income (i.e. the deferred tax adjustments are accompanied by the recordation of equal regulatory assets or liabilities). Entities shall request and obtain specific FERC approval for all other adjustments to the deferred tax accounts, including those related to nonjurisdictional activity. The filing shall include a complete explanation of and justification for an entity’s proposed accounting. 4. REPORTING ANY NET INCOME EFFECT Question: If the initial implementation of SFAS 109 affects net income and an entity obtains FERC approval to adjust its deferred tax accounts, where should the income effect be reported in FERC financial reports (i.e. FERC Form Nos. 1, 1-F, 2 and 2-A etc.)? Response: The FERC report forms do not currently have a line for reporting the cumulative effect of a change in accounting princip
