Cost Associated with mothballing a nuclear power plant at the end of its useful life, approx 20 yrs in the future, will be paid by the utility company at the end of the 20 years period. When should the expense be recognized for this expenditure? Current utility users receive the benefit of this plant. Do accounting rules require them to pay the cost in terms of increased utility rates by including the expense of the future mothballing in their rates, or should the expense be delayed for 20 years, until the cash is actually paid out?

1. How should an Accountant apply the principles of Utilitarianism to decide how this expense should be recorded?

2. In the manner consistent with the principles of Deontology, what is the right thing to do? What is the right reason for your decision?

3. To record an expense, accountant must be able to estimate the amount of the expenditure. Will it be difficult to estimate an expense to be paid 20 years in the future? Why?

4. If you choose to recognize the expense after 20 years, what categorical imperative does this support? Explain.

5. If you choose to recognize the expense over the 20 years, what categorical imperative does this support? Explain.