The following principles shall apply when preparing Interim and Final Returns in accordance with this Schedule:
A) No expense shall be taken into account for the purpose of determining the Interim/Final Rate of Return for any financial year unless such expense has been reasonably and necessarily incurred in producing the operating revenues for the said year.
B) Interest in excess of 15% on moneys borrowed is allowable as an expense, together with all interest paid on consumer deposits.
C) No amortization or goodwill costs will be allowed as expenses in determining operating income.
D) The foregoing shall not be interpreted to exclude charitable donations and similar non-essential expenditures if such do not exceed 2% of the total operating costs defined in this Schedule as “II”. Guarantee fees payable in connection with debt obligations arising under agreements entered into on and after the date of the coming into operation of this Act shall be excluded from the calculation of operating expenses.
E) Fixed physical assets shall be valued at the historical or revalued basis as appropriate with International Financial Reporting Standards less consumer contribution and less the amount of accumulated depreciation computed at annual rates designed to depreciate fully the said assets on straight line basis over their respective estimated useful lives.
F) Depreciation provisions shall be in accordance with International Financial Reporting Standards and shall be applied on a consistent basis to the historical or revalued values of the fixed physical assets as appropriate.
G) All contributions made to, and all expenses incurred in establishing and maintaining, a captive insurance fund for the company's benefit.
(Amended by Act 26 of 2001 and Act 12 of 2006)