The financial reports of a power company : Part 5
Date : 12 January 2026
## 9. Classification of maintenance expenses versus capital expenditure
- Company incurs substantial costs for maintenance and upgrades of distribution and transmission assets, alongside large capital projects.
- The accounting policy and practical criteria for distinguishing between capital expenditure (capitalised as PPE) and operating maintenance expense are not described in sufficient detail, despite the material impact on current‑period profit via depreciation timing.
**Audit concerns**
- Whether there is an aggressive tendency to capitalise borderline expenditures, thereby deferring expense recognition.
- Whether sample testing of work orders, contracts and approval documents supports the chosen classification on a consistent basis.
***
## 10. Other income and one‑off gains from asset disposals
- In certain years, “other income” and gains from sale or transfer of assets provide a noticeable contribution to net profit, but the nature, counterparties, and commercial rationale of these transactions are not fully explained in the notes.
- This reduces transparency regarding the sustainability of earnings and whether such transactions are recurring or one‑off in nature.
**Audit concerns**
- Whether these asset disposals or transfers are at fair value and at arm’s‑length, especially where counterparties are related parties or government entities.
- Whether any arrangements bundle operational or financial concessions that are not clearly disclosed, potentially masking economic substance.
End——————————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
Date : 12 January 2026
## 9. Classification of maintenance expenses versus capital expenditure
- Company incurs substantial costs for maintenance and upgrades of distribution and transmission assets, alongside large capital projects.
- The accounting policy and practical criteria for distinguishing between capital expenditure (capitalised as PPE) and operating maintenance expense are not described in sufficient detail, despite the material impact on current‑period profit via depreciation timing.
**Audit concerns**
- Whether there is an aggressive tendency to capitalise borderline expenditures, thereby deferring expense recognition.
- Whether sample testing of work orders, contracts and approval documents supports the chosen classification on a consistent basis.
***
## 10. Other income and one‑off gains from asset disposals
- In certain years, “other income” and gains from sale or transfer of assets provide a noticeable contribution to net profit, but the nature, counterparties, and commercial rationale of these transactions are not fully explained in the notes.
- This reduces transparency regarding the sustainability of earnings and whether such transactions are recurring or one‑off in nature.
**Audit concerns**
- Whether these asset disposals or transfers are at fair value and at arm’s‑length, especially where counterparties are related parties or government entities.
- Whether any arrangements bundle operational or financial concessions that are not clearly disclosed, potentially masking economic substance.
End——————————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
The financial reports of a power company : Part 5
Date : 12 January 2026
## 9. Classification of maintenance expenses versus capital expenditure
- Company incurs substantial costs for maintenance and upgrades of distribution and transmission assets, alongside large capital projects.
- The accounting policy and practical criteria for distinguishing between capital expenditure (capitalised as PPE) and operating maintenance expense are not described in sufficient detail, despite the material impact on current‑period profit via depreciation timing.
**Audit concerns**
- Whether there is an aggressive tendency to capitalise borderline expenditures, thereby deferring expense recognition.
- Whether sample testing of work orders, contracts and approval documents supports the chosen classification on a consistent basis.
***
## 10. Other income and one‑off gains from asset disposals
- In certain years, “other income” and gains from sale or transfer of assets provide a noticeable contribution to net profit, but the nature, counterparties, and commercial rationale of these transactions are not fully explained in the notes.
- This reduces transparency regarding the sustainability of earnings and whether such transactions are recurring or one‑off in nature.
**Audit concerns**
- Whether these asset disposals or transfers are at fair value and at arm’s‑length, especially where counterparties are related parties or government entities.
- Whether any arrangements bundle operational or financial concessions that are not clearly disclosed, potentially masking economic substance.
End——————————————————————————————————————————————————
#FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1
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