Revaluation of assets for the 2009 price review

Ofwat letter (about 2 pages) confirming that water and sewerage companies in England and Wales will be required to update their estimates of modern equivalent asset values as part of the 2009 review.

This revaluation of the companies' assets will not directly affect the amount of capital on which companies are entitled to a return (the regulatory capital value). But it will affect the calculation of current cost depreciation, which in turn is a factor likely to be taken into account in setting the amounts treated as depreciation in the regulatory calculation of price limits, and thereby the time profile of the recovery of capital maintenance expenditure through charges.

For further information or advice please contact Franck Latrémolière.

Filed under Ofwat, Price controls, Water.

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