Regulatory deferral account balances usually represent timing differences between the recognition of items of income or expenses for regulatory purposes and the recognition of those items for financial reporting purposes.

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Regulatory deferral account balances are used by entities that are subject to rate regulation, allowing them to defer certain costs or revenues on their financial statements to match the timing of when those costs or revenues are recovered or charged to customers through regulated rates, thus representing timing differences between regulatory and financial reporting recognition.

Regulatory Deferral Account Balances Usually Represent Timing Differences Between the Recognition