DTE Energy 2012 Annual Report Download - page 62

Table of Contents
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Beginning balances January 1, 2012 $(4)
$(30)
$(125)
$1
$(158)
Current period change, net of tax —
1
(2)
1
—
Ending balances December 31, 2012 




Cash Equivalents and Restricted Cash
Cash and cash equivalents include cash on hand, cash in banks and temporary investments purchased with remaining maturities of three months or
less. Restricted cash consists of funds held to satisfy requirements of certain debt, primarily Securitization bonds, and partnership operating agreements.
Restricted cash designated for interest and principal payments within one year is classified as a current asset.
Receivables
Accounts receivable are primarily composed of trade receivables and unbilled revenue. Our accounts receivable are stated at net realizable value.
The allowance for doubtful accounts for DTE Electric and DTE Gas is generally calculated using the aging approach that utilizes rates developed in
reserve studies. We establish an allowance for uncollectible accounts based on historical losses and management’s assessment of existing economic conditions,
customer trends, and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is
typically in 21 days, however, factors such as assistance programs may delay aggressive action. We assess late payment fees on trade receivables based on
past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off was changed in
2012 from 365 days to 150 days after service has been terminated.
The customer allowance for doubtful accounts for our other businesses is calculated based on specific review of probable future collections based on
receivable balances in excess of 30 days.
Unbilled revenues of $686 million and $597 million are included in customer accounts receivable at December 31, 2012 and 2011, respectively.
Notes Receivable
Notes receivable, or financing receivables, are primarily comprised of capital lease receivables and loans and are included in Notes receivable and Other
current assets on the Company’s Consolidated Statements of Financial Position.
Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Company ceases
accruing interest (nonaccrual status), considers a note receivable impaired, and establishes an allowance for credit loss when it is probable that all principal
and interest amounts due will not be collected in accordance with the contractual terms of the note receivable. Cash payments received on nonaccrual status
notes receivable, that do not bring the account contractually current, are first applied to contractually owed past due interest, with any remainder applied to
principal. Accrual of interest is generally resumed when the note receivable becomes contractually current.
In determining the allowance for credit losses for notes receivable, we consider the historical payment experience and other factors that are expected to
have a specific impact on the counterparty’s ability to pay. In addition, the Company monitors the credit ratings of the counterparties from which we have
notes receivable.
Inventories
The Company generally values inventory at average cost.
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