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, 2020. 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, 2021. The Company is currently in the process of evaluating the impact of
adoption of this ASU on the financial statements.
Note 2 — Property, Plant and Equipment
The components of property, plant and equipment as of December 31, 2018 and 2017 were as
follows:
Useful Lives
(in thousands) 2018 2017 (in years)
Utility Property:
Land and land rights $ 3,346 $ 3,305 -
Source of supply 65,807 65,608 3-70
Pumping and purification 29,823 31,075 7-64
Transmission and distribution, including
services, meters and hydrants 176,263 161,193 15-91]
General and other equipment 16,742 16,541 7-75
Intangible plant 790 790 20
Construction work in progress 2,175 1,978
Total utility property 294,946 280,490
Total non-utility property 5 $ 5-10
Total property, plant and equipment 294,951 280,495
Less accumulated depreciation (73,091) (69,997)
Property, plant and equipment, net $ 221,860 $ 210,498
The provision for depreciation is computed on the straight-line method over the estimated
useful lives of the assets, which range from 3 to 9f years. The weighted average composite
depreciation rate was 2.54% and 2.56% in 2018 and 2017, respectively.
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