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The management of Provincial Electricity Authority and its subsidiary has assessed that the adoption of
these new and revised Thai accounting standards, Thai fnancial reporting standards, Thai standing interpretations,
and Thai fnancial reporting interpretations as mentioned above, will not have signifcant impacts on the fnancial
statements for the period when they are initially applied.

3. Summary of Significant Accounting Policies

3.1 Cash and cash e uivalents
Cash and cash equivalents comprise cash on hand, deposits at banks and fnancial institutions with
original maturities of 3 months or less, excluding deposits at banks used as collateral.

3.2 Trade accounts receivable
Trade accounts receivable are stated at net realizable value. Allowance for doubtful accounts are based
on contingent loss from uncollectible receivables which are estimated from historical collection experiences and a

review of the current status of the non-governmental or state enterprise receivables outstanding at the statements
of fnancial position date, after deducting electricity usage guarantee in accordance with the regulation of the
Ministry of Finance regarding “Accounting and Finance of Government Enterprise, B.E. 2548 (2005)” and a
resolution of PEA’s Audit Committee Meeting No. 3/2549 dated on March 10, 2006 as follows :

Overdue period Percentage of allowance for
doubtful accounts
Over 6 months - 1 year 50
Over 1 year 100

Increases and decreases in allowance for doubtful accounts are recognized as expenses or income for
the period when incurred.

3.3 Materials and supplies
Materials and supplies are stated at the lower of the cost or net realizable value. The cost is determined
using the weighted average cost method. Allowance is made in full for obsolete materials and supplies and for
materials and supplies pending for improvement.

3.4 Special purpose deposits at fnancial institutions
Special purpose deposits at fnancial institutions consist of :
3. .1 Special purpose deposits at fnancial institutions, which are presented as current assets in the
statements of fnancial position, are deposits to be used within one accounting period and with the specifc
purposes and conditions which are electricity usage guarantee fund, sinking fund for repayment of bonds, and

PEA fund for guarantee of employees’ loans. All of which can be used in Provincial Electricity Authority’s activities
in case of rovincial lectricity having defcits in working capital. Interest from electricity usage guarantee fund
is used for benefts of electricity users, interest from und is used for scholarships, training, analysis and
research. And the subsidies received from government and other governmental agencies are used for projects
such as the subsidy from nergy Conservation olicy from the nergy olicy and lanning ffce.

100 SMART PEA
Annual Report 2016 Provincial Electricity Authority