New Accounting Standards to be Adopted in the Future
Leases
In February 2016, the FASB issued ASU 2016-02, “Leases”. The ASU requires all leases with
lease terms more than 12 months to be capitalized as a right of use asset and lease liability
on the balance sheet at the date of lease commencement. Leases will be classified as either
finance leases or operating leases. This distinction will be relevant for the pattern of expense
recognition in the income statement. This ASU will be effective for the Company for the year
ending December 31, 2022. The Company is currently in the process of evaluating the impact
of adoption of this ASU on the financial statements.
Credit Losses
In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial
instruments”. The ASU requires a financial asset {including trade receivables} measured at
amortized cost basis to be presented at the net amount expected to be collected. Thus, the
income statement will reflect the measurement of credit losses for newly recognized financial
assets as well as the expected increases or decreases of expected credit losses that have
taken place during the period. This ASU will be effective for the Company for the year ending
December 31, 2023. The Company is currently in the process of evaluating the impact of
adoption of this ASU on the financial statements.
Property, Plant and Equipment
The components of property, plant and equipment as of December 31, 2021 and 2020 were
as follows:
Useful Lives
(in thousands) 2021 2020 (in years)
Utility Property:
Land and land rights S 5,956 $ 5,972 -
Source of supply 74,318 73,721 3-70
Pumping and purification 32,374 31,846 7-64
Transmission and distribution, including
services, meters and hydrants 202,139 194,244 15-91
General and other equipment 17,017 17,023 7-75
Intangible plant 790 790 20
Construction work in progress 376 792
Total utility property 332,970 324,388
Total non-utility property 5 5 5-10
Total property, plant and equipment 332,975 324,393
Less accumulated depreciation (87,778) (81,924)
Property, Plant and Equipment, net $ 245,197 § 242,469
20
