Accounts Receivable ~ Unbilled, Net
We read our customer meters on a monthly basis and record revenues based on meter
reading results. Information from the last meter reading date is used to estimate the value of
unbilled revenues through the end of the accounting period. Estimates of water utility
revenues for water delivered to customers but not yet billed are accrued at the end of each
accounting period. Actual results could differ from those estimates.
Inventory
Inventory is stated at the lower of cost or net realizable value, cost being determined using
the average cost method which approximates the first-in, first-out (FIFO) method.
Deferred Land Costs
Deferred land costs have been recorded in all reporting periods leading up to and including
2019 by Southwood, the Company’s real estate subsidiary. Southwood was passively engaged
in the management and maintenance of land holdings outside of any of the land holdings
held in ownership by the Company's utility subsidiaries. Included in deferred land costs is the
Company’s original basis in its undeveloped landholdings and any land improvement costs,
which are stated at the lower of cost or market. All costs associated with real estate and land
projects are capitalized and allocated to the project to which the costs relate. Administrative
labor and the related fringe benefit costs attributable to the acquisition, active development,
and construction of land parcels are capitalized as deferred land costs. No labor and benefits
were capitalized for the years ended December 31, 2020 and 2019.
As of the end of 2019, all of the land holdings previously owned by Southwood were
transferred to the Company, which now has assumed the passive management and
maintenance of those land holdings. On a going forward basis, Southwood will be
maintained as a “corporate shell” allowing for its usage in possible future land management
opportunities, should they occur.
Deferred Charges and Other Assets
Deferred charges include certain regulatory assets and other assets. Regulatory assets are
amortized over the periods they are recovered through NHPUC-authorized water rates. The
Company’s utility subsidiaries have recorded certain regulatory assets in cases where the
NHPUC has permitted, or is expected to permit, recovery of these costs over future periods.
Currently, the regulatory assets are being amortized over periods ranging from 2 to 25 years.
Unamortized Debt Issuance Costs
Unamortized debt issuance costs are amortized over the original term of the related bonds
and notes. The Company’s utility subsidiaries have recorded unamortized debt issuance costs
in cases where the NHPUC has permitted or is expected to permit recovery of these costs
over future periods. The debt issuance costs are being amortized over the original lives of the
associated debt.
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