Revenue Recognition issues Implementation status update

Transcription

1 Revenue Recognition issues Implementation status update EEI-AGA-PwC Revenue Recognition Workshop Sept , 2017 Dallas, TX

2 ASC 606 implementation in the U.S. () P&U Revenue Recognition Task Force Revenue Recognition Working Group FinRec Revenue Recognition Guide Sector Task Forces TRG, SEC and FASB 2

3 P&U task force Issues status update Issue # Description RRWG Initial FinREC Comment Period Final Comments 13-1 Scope clarification regarding tariff sales to regulated customers Ended Approved by FinREC in July. Tariff sales (other than Alternative Revenue Program amounts) are in scope Requirements and similar contracts with variable quantities Approved for public exposure 8/1/17-10/1/17 Variable quantities represent a marketing offer, not variable consideration Step vs. Strip price arrangements Approved for public exposure 9/1/17-11/1/17 Revenue recognition based on invoice price is generally appropriate in absence of a significant financing element Determining SASP for forward sales of commodities (Formerly Application of Series Guidance to Storable Commodities) FASB Technical Inquiry affirmed that SASP must be determined based on facts and circumstances. The forward curve is not necessarily appropriate in all circumstances. 3

4 P&U task force (continued) Issues status update Issue # Description RRWG Initial FinREC Comment Period Final Comments 13-5 Accounting for Contract Modifications (Blend & Extend) FASB Technical Inquiry affirmed that either method was acceptable Partial contract terminations FASB Technical Inquiry concluded that contract modification guidance applies Accounting for bundled arrangements FASB Technical Inquiry affirmed that revenue recognition as power is generated/capacity made available is appropriate Revenue recognition timing for newly created RECs Revenue recognition as power is generated or as RECs are physically delivered may be appropriate based on facts and circumstances and application of judgment in assessing the point in time indicators. 4

5 P&U task force (continued) Issues status update Issue # Description 13-9 Contributions in Aid of Construction Sales of nonfinancial assets RRWG Initial FinREC Collectibility FinREC chair asked TF to keep on list as lowest priority Income statement display of alternative revenue programs Comment Period Final Comments FASB TI resulting from separate issue affirmed TF position that CIAC in a regulated environment is not in scope. However, there may be certain instances where CIAC could be determined to be in scope. N/A N/A N/A N/A FASB addressed via separate standard-setting. Issue removed. N/A N/A FASB representatives agreed with revised TF approach & conclusion. TF recommended dropping issue. FASB TI 1/17/17 affirmed TF paper position that either method is appropriate. 5

6 Finalizing the guidance Remaining Power & Utility issues to be exposed publicly next week - Two-month public comment period Audit & Accounting Guide Revenue Recognition Publications>Accounting>Standards>FASB Standards - Updated quarterly as issues are finalized Purchase options: - Annual online subscription available via online library, or - Combination print/pdf, which includes completed chapters as of January 2017 in print as well as online PDF access to finalized implementation issues Questions? 6

7 Thank you 2017 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC United States helps organizations and individuals create the value they re looking for. We re a member of the PwC network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at