ABSTRACT
The Drakensberg Pumped Storage Scheme (in the South African province of KwaZuluNatal) is a hydroelectric facility relying on water in four dams (the Driekloof, Kilburb, Woodstock and Driel dams) to generate electricity during periods of peak power demand. Water from each of the dams is released, turning a series of turbines which produce electricity available for supply into the national grid. Should the water in the dams be accounted for as inventory? Although the water is not held for sale in the ordinary course of business by the power utility, it could be construed as a ‘material’ to be consumed in the production process. The water in each of the dams is used to generate hydroelectric power, after which its potential energy is lost. In this way, any water still in the dam could be accounted for as ‘energy in production’. Think carefully about this proposed accounting while working through this chapter. Do not forget to go back to the definition of assets and income in the Conceptual Framework.
