a $118 million charge for reduction in the book value


Senior Member
Español de Uruguay

I'm not understanding the meaning of "charge" in this sentence: "The company reported a record income of $251.2 million, after a $118 million charge for reduction in the book value of its oil and gas properties."
This comes from an exercise on financial vocabulary.
I don't get it. Does "charge" mean to receive money in any way? It's not the classical meaning of asking for acertain sum of money in exchange for a service.
I found some other examples of the word used with the same meaning over the internet but they still don't clarify anything. I'll include them just in case you guys can understand more.

" BellSouth Corporation said yesterday that it would take a charge of $20 million to $25 million against earnings in the first quarter because of the winter storms that struck the Eastern Seaboard in mid-March"

The $43 million charge for excessive earnings arose from a Jan.11 ruling by the Public Utilities Commission of Ohio."
  • susantash

    Senior Member
    Español de Uruguay
    Thanks for answering. And so quickly!:)

    Sorry, but there are some issues I still don't understand. For example: how can a company report a record income if it's had to assume a "charge"? (first example sentence) Does this mean that they've still had a record income, despite the charge? And how can a company have a "charge for excessive earnings"??? Isn't the "charge" supposed to be money they don't earn, at the end of the day?


    Senior Member
    American English
    Yes, I think they still had record earning despite the charge.

    As for "charge for excessive earnings," I see that it's the Public Utilities Commission. I don't know how they work, so I can only describe broadly how things work in Hong Kong. Our two electrical companies operate under a governmental Scheme of Control Agreement that limits how much they can earn. It would seem to work the same way in your last example, and they are being penalized (charged) for excessive earnings.

    The Scheme of Control Agreements I mentioned are online here if you really want to read the PDF files. :)
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