Accounts Receivable — Billed, Net
Accounts receivable are recorded at the invoiced amounts. The allowance for doubtful
accounts is our best estimate of the amount of probable credit losses in our existing accounts
receivable, and is determined based on historical write-off experience and the aging of
account balances. We review the allowance for doubtful accounts quarterly. Account bal-
ances are written off against the allowance when it is probable the receivable will not be
recovered.
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, using the average cost method, or market.
Deferred Land Costs
Included in deferred land costs is our Company’s original basis in its undeveloped land-
holdings 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, 2015 and 2014.
Deferred Charges and Other Assets
Deferred charges include certain regulatory assets and costs of obtaining debt financing.
Regulatory assets are amortized over the periods they are recovered through NHPUC-
authorized water rates. Deferred financing costs are amortized over the term of the related
bonds and notes. Our 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.
Contributions in Aid of Construction
Under construction contracts with real estate developers and others, our Company’s utility
subsidiaries may receive non-refundable advances for the cost of installing new water mains.
These advances are recorded as Contributions in Aid of Construction (“CIAC”). The utility
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