Om regnskabsmæssige problemstillinger i fjernvarmevirksomheder

Mai Hartz

Student thesis: Master thesis


Aim of the thesis at hand is to analyze the effect that rate regulation has on certain areas of financial reporting for Danish district heating companies. Danish rate regulation is quite comprehensive compared to other European countries due to the monopoly status of the district heating companies. A district heating company is, according to Danish legislation, not allowed to earn money over a period. As a result, investors are not interested in owning these companies, as it is impossible to make a satisfying profit. As results of rate regulation, there are certain areas of income, costs, assets and liabilities that are not “normal” as in a commercial business, because rate regulation has rules that are not immediately compliant with the Danish law of financial statements1. In this thesis, I therefore chose to analyze the areas that to me are most important. My choice of “important areas” are been based on interviews, analyzing eleven financial reports and on my own experience – as I have worked with auditing and advisory to the supply-business for the past 10 years. For each item, I analyzed different theoretic ways to measure and present the item in the financial statements; primarily based on the Danish regulation of financial reporting, but also based on international standards where relevant. The items analyzed in the thesis are: Connection fee, Contingencies for future investments, Regulatory surplus and deficit, Unrealized costs and timely differences in consumer payment, Intangible assets (rights) when scrapping tangible fixed assets, Note on rate regulated activities from the Danish Business authorities (2010) The primary conclusions are that for each item there are generel indications of the right way to treat the item in the financial statement. Still it is difficult though, because there are substantial differences that needs to be assessed for every item and every company. The thesis also concludes a general need for guidance – or even special rules that allows exceptions for the district heating companies that ensures compliance between the regulatory rules and the general laws of financial statements. This obviously means changes in legislation, but will in my opinion ensure the value for the user of the financial statements, where today at least the consumers’ need of knowledge of prices of the heating and budgets are not met.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2015
Number of pages106