Regulatory accounting for utility regulations is an accounting system that demonstrates compliances with transparency, objectivity and non-discrimination obligations. Other compliances include anticompetitive behavior and systematic of disaggregation of costs, revenue, asset and liabilities against defined regulatory Markets and Services. These compliances enable National Regulatory Authorities (NRAs) to regulate diligently and prudently utilities that promotes effective competition and economic efficiency of the country. The compliances also enable Revenue Authorities to collect correctly corporate taxes, because the regulatory accounting system discloses cost information. The cost information is used to calculate the corporate taxes from the net profit. The net profit is revenue less the costs.

Until the late 1980s, most of the governments around the world owned and operated the utilities on monopoly basis such as telecommunications, broadcasting, electricity, gas and water. The state owned monopoly utilities used to prepare and submit the state government audited and consolidated accounts for their business operations. Normally, the audited and consolidated accounts are not transparent and objective; they do not disaggregate the costs, revenues, assets and liabilities against defined regulatory Markets and Services. However, the audited and consolidated accounts worked well during the monopoly era because there was no competition, and the state owned utilities were funded fully by the state government.

In mid-1995, reform of the utilities took place in most of the countries around the world. This reform liberalized markets of the utilities and brought them up to competition. The reform brought more new entrants and entered into the markets. The new entrants increased competition and would like to know the costs of accessing the existing utilities. Knowing the costs for accessing the existing utilities became a big problem due to lack of the regulatory accounting system. The regulatory accounting system for the utility regulations solves the problem of knowing the costs for accessing the existing utilities by the new entrants. However, the liberalized and competitive utilities such as Mobile Network Operators (MNOs) are still preparing and submitting the NRAs and state governments the legacy audited and consolidated accounts, which are subjective. As a result the governments and NRAs continue collecting incorrect amount of the corporate taxes and regulatory dues respectively.


  • Understand well legal and regulatory requirements for the regulatory accounting system;
  • Identify, define and analyse markets and services of the utilities;
  • Determine Significant Market Power (SMP) utility;
  • Understand concepts of accounting separation and cost accounting;
  • Get knowledge in preparing Current Cost Accounting (CCA) Financial Statements;
  • Get knowledge of accounting cost models; and
  • Analyse Top-down and Bottom-up cost models.



The workshop includes presentations by the facilitator, country presentations and interactive sessions.



1) Legal and regulatory requirements for the regulatory accounting system: country case studies

  • Approach of European Union Member States;
  • Approach of Inter-American Telecommunication Commission Member States;
  • Approach of Asian Pacific Telecommunication Union Member States; and
  • Approach of African Telecommunication Union Member States.


2) Accounting Separation

  • Defining Accounting Separation;
  • Principles of Accounting Separation;
  • Structure of separated accounts;
  • Identifying and defining markets and services;
  • An example of a list of communications markets identified and recommended by the European Commission;
  • Analysing market structure; and
  • Determining the existence of a dominant market position.


3) Cost Accounting

  • Defining cost categories;
  • Analysis of different cost methodologies;
  • Types of cost accounting models; and
  • Analysis of Top-down versus Bottom-up cost models;


4) Key parameters in cost accounting models

  • Weighted Average Cost of Capital;
  • Analysis of Economic Depreciation and associated life span of assets;
  • Annualization of Capital Expenditure (CAPEX);
  • Estimation of Operating Expenditure (OPEX);
  • Estimation of Total Annual Costs;
  • Calculation of Route Factors; and
  • Service Costing.


National Regulatory Authorities; Revenue Authorities; Accountants; Engineers; Economists; Financial Analysts; Ministry of Finance; Ministry of Communications; and other government policy makers.



Basic knowledge of finance, accounting, economics, engineering and utility regulations.

5th - 16th September 202210 daysNairobi, Kenya