ComEd 2013 Annual Report Download - page 123

PECO and BGE customer accountsare written off consistent withapprovedregulatoryrequirements. ComEd’s, PECO’s and BGE’s
provisionsfor uncollectible accountswill continue to beaffectedbychangesinvolume,pricesandeconomic conditionsaswell as
changesinICC, PAPUC and MDPSC regulations, respectively. See Note 3—RegulatoryMattersfor additional information regarding
theregulatoryrecoveryofuncollectible accountsreceivable at ComEd.
Variable Interest Entities
Exelon accountsfor itsinvestmentsinandarrangementswith VIEs basedon the authoritativeguidancewhich includesthefollowing
specific requirements:
•requiresan entityto qualitativelyassess whether itshouldconsolidate a VIE basedon whether the entity(1)hasthepower to
directmattersthat mostsignificantlyimpacttheactivitiesoftheVIE, and(2)hastheobligation to absorblossesor therightto
receivebenefitsoftheVIE that couldpotentiallybesignificant to theVIE,
•requiresan ongoingreconsideration ofthis assessment insteadofonlyupon certaintriggeringevents, and
•requiresthe entitythat consolidatesaVIE (theprimarybeneficiary) to present separatelyon thefaceofitsbalancesheet (1)the
assetsoftheconsolidated VIE, if theycan beusedto onlysettle specific obligationsoftheconsolidated VIE, and(2)the
liabilitiesofaconsolidated VIE for which creditorsdo not haverecoursetothegeneral creditoftheprimarybeneficiary.
Basedon theaboveaccountingguidance,Exelon hasadoptedthefollowingpoliciesrelatedto variable interest entities:
•Ex
elon haspresentedseparatelyon itsConsolidatedBalanceSheets, to theextent material,theassetsofitsconsolidated VIEs
that can onlybeusedto settle specific obligationsoftheconsolidated VIE, andtheliabilitiesofExelon’s consolidated VIEs for
which creditorsdo not haverecoursetoExelon’s general credit.
•Exelon hasqualitativelyassessedwhether theequityholdersofthe entityhavethepower to directmattersthat mostsignificantly
impactthe entity.
See Note 2—Variable InterestEntitiesfor additional information.
Inventories
Inventoryisrecordedat thelower ofweightedaveragecostormarket.Provisionsare recordedfor excess andobsolete inventory.
Fossil Fuel. Fossilfuel inventoryincludestheweightedaveragecostsofstorednatural gas, propane andoil.Thecostsofnatural
gas, propane,coal andoil are generallyincludedininventorywhen purchasedandchargedto fuel expensewhen usedor sold.
Materials and Supplies. Materialsandsuppliesinventorygenerallyincludestheweightedaveragecostsoftransmission,
distribution andgeneratingplant materials. Materialsare generallychargedto inventorywhen purchasedandexpensedor
capitalizedto property, plant andequipment,asappropriate,when installedor used.
Emission Allowances. Emission allowancesare includedininventory(for emission allowancesexercisable inthecurrent year)and
other deferredd
ebits(for emission allowancesthat are exercisable beyondone year)andare carriedat thelower ofweighted
averagecostormarket andchargedto fuel expenseastheyare usedin operations.
Marketable Securities
All marketable securitiesare reportedat fairvalue.Marketable securitiesheldintheNDT funds, certainGeneration Rabbi trust
investmentsand BGE’s Rabbi trustinvestmentsare classifiedastradingsecuritiesandall other securitiesare classifiedasavailable-
for-sale securities. Realizedandunrealizedgainsandlosses, net oftax, on Generation’s NDT funds associatedwiththeformer
ComEd andformer PECO nuclear generatingunits(RegulatoryAgreement Units) are includedinregulatoryliabilitiesat Exelon,
ComEd and PECO andin noncurrent payablesto affiliatesat Generation andin noncurrent receivablesfromaffiliatesat ComEd and
PECO. Realizedandunrealizedgainsandlosses, net oftax, on Generation’s NDT funds associatedwiththeformer AmerGen
nuclear generatingunits, theZion generatingstation andportionsofthePeach Bottomnuclear generatingunitsnot subjecttoa
regulatoryagreement (Non-RegulatoryAgreement Units) are includedin earnings at Exelon andGeneration.Realizedand
unrealizedgainsandlosses, net oftax, on certainGeneration Rabbi trustinvestmentsand BGE’s Rabbi trustinvestmentsare
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