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  • August 2017 (Revised December 2017)
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Accounting for Nuclear Power Provisions at RWE

By: Paul Healy and Jonas Heese
  • Format:Print
  • | Language:English
  • | Pages:14
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Abstract

In early 2016, RWE, a utility that operates nuclear power plants in Germany, came under scrutiny from regulators and the media over the adequacy of its provisions for costs of decommissioning and dismantling (D&D) its nuclear power plants. Accounting standards required utilities to record the present value of projected D&D costs as a liability. However, there were many uncertainties associated with these estimates given the actual cash outlays that would be incurred decades into the future. In addition, German government bond rates used to discount projected future costs had fallen to record lows, and RWE as well as its competitors were struggling with depressed electricity prices. Would RWE's provisions be adequate to cover the future costs?

Keywords

Liabilities; Provisions For Long-term Obligations; Discounting; Accounting; Energy Generation; Energy Industry; Germany

Citation

Healy, Paul, and Jonas Heese. "Accounting for Nuclear Power Provisions at RWE." Harvard Business School Case 118-013, August 2017. (Revised December 2017.)
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About The Authors

Paul M. Healy

→More Publications

Jonas Heese

Accounting and Management
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Related Work

    • December 2017
    • Faculty Research

    Accounting for Nuclear Power Provisions at RWE

    By: Jonas Heese
    • March 2019
    • Faculty Research

    Accounting for Nuclear Power Provisions at RWE, Instructor Spreadsheet

    By: Jonas Heese
    • March 2019
    • Faculty Research

    Accounting for Nuclear Power Provisions at RWE, Student Spreadsheet

    By: Jonas Heese
    • August 2017 (Revised December 2017)
    • Faculty Research

    Accounting for Nuclear Power Provisions at RWE

    By: Paul Healy and Jonas Heese
Related Work
  • Accounting for Nuclear Power Provisions at RWE By: Jonas Heese
  • Accounting for Nuclear Power Provisions at RWE, Instructor Spreadsheet By: Jonas Heese
  • Accounting for Nuclear Power Provisions at RWE, Student Spreadsheet By: Jonas Heese
  • Accounting for Nuclear Power Provisions at RWE By: Paul Healy and Jonas Heese
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