Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 428

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 428
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 a regulatory asset related to the ratemaking treatment of the tax effects of book depreciation for the equity component of AFUDC that has been capitalized to property, plant, and equipment but for which there is no corresponding tax basis.  Equity-AFUDC is a component of property, plant, and equipment that is included in rate base when the plant is placed in service.  There is a regulatory liability related to the adjustment of Entergy’s net deferred income taxes that was required by the enactment in December 2017 of a change in the federal corporate income tax rate, which is discussed in Note 2 and 3 to the financial statements.Cash and Cash EquivalentsEntergy considers all unrestricted highly liquid debt instruments with an original maturity of three months or less at date of purchase to be cash equivalents.Securitization Recovery Trust AccountsThe funds that Entergy New Orleans and Entergy Texas hold in their securitization recovery trust accounts are not classified as cash and cash equivalents or restricted cash and cash equivalents because of their nature, uses, and restrictions.  These funds are classified as part of other current assets and other investments, depending on the timeframe within which the Registrant Subsidiary expects to use the funds.

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Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements

Allowance for Doubtful AccountsThe allowance for doubtful accounts reflects Entergy’s best estimate of expected losses on its accounts receivable balances.  The allowance is calculated as the historical rate of customer write-offs multiplied by the current accounts receivable balance, taking into account the length of time the receivable balances have been outstanding.  Although the rate of customer write-offs has historically experienced minimal variation, management monitors the current condition of individual customer accounts to manage collections and ensure bad debt expense is recorded in a timely manner.  The Utility operating companies’ customer accounts receivable are written off consistent with approved regulatory requirements.  See Note 19 to the financial statements for further details on the allowance for doubtful accounts.Materials and SuppliesMaterials and supplies consist of tangible goods, equipment, and other materials that Entergy holds for use or consumption in the normal course of business, whether for capital projects or operation and maintenance activities, or that are required to be kept for regulatory reasons or service reliability.  Materials and supplies are valued at a weighted average unit cost when expensed or capitalized, as appropriate, when used or installed.  Materials and supplies are valued at the lower of weighted average cost or net realizable value, net of