FASB to address nuclear plant closing costs.

The Financial Accounting Standards Board added to its agenda a new project on accounting for the costs of decommissioning nuclear power plants.

The estimated cost of decommissioning--decontaminating a nuclear plant at the end of its useful life--traditionally has been recognized over the life of the plant as a component of depreciation. "The objective of the project is to determine if and when a liability for nuclear decommissioning should be recognized," said FASB Chairman Dennis R. Beresford. If such a liability is recognized, the project will determine how it should be measured and whether a corresponding asset is created.

The FASB said it also would obtain information from other industry groups about their siterestoration or exit costs and that it would consider whether tentative decisions reached on decommissioning should be extended to those situations.

For many years accountants have been debating how to account for decommissioning of nuclear plants. The board agreed to add this project at the request of the Edison Electric Institute (EEI), an association of utility companies. The EEI had discussed the current practices used by electric utilities, increased attention given to current accounting practices and the potential for inconsistencies if other industries are using different accounting for similar situations.

The FASB said it planned to begin deliberations on this issue in the third quarter of 1994.