Revenue for power and utilities companies

KPMG’s insights on ASC 606 implementation. With the new revenue recognition standard’s effective date approaching, KPMG reports on the most significant industry issues.

Applicability

• Companies in the power and utilities industry

Relevant dates

Mandatory effective dates and early adoption provisions:

Annual periods:

For public business entities and certain not-for-profit entities the effective date for annual periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for annual periods is the fiscal years beginning after Dec. 15, 2018.

Interim periods:

For public business entities and certain not-for-profit entities the effective date for interim periods is the fiscal years beginning after Dec. 15, 2017.

For all other entites the effective date for interim periods is the fiscal years beginning after Dec. 15, 2019.

Early adoption:

For public business entities and certain not-for-profit entities the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

For all other entites the effective date for early adoption is the fiscal years beginning after Dec. 15, 2016.

Key impacts

• Identifying the customer and the contract under the new standard may require significant judgment and impact the timing of revenue recognition and the accounting for certain contract costs.
• Accounting for variable consideration requires a different contract analysis and may require the estimation of fees.
• Power and utilities companies will need to determine whether promised goods or services should be accounted for as a single performance obligation (i.e. a ‘series’), as well as the effect of the new standard on alternative revenue programs, requirements contracts, renewable engery credits and capacity sales.

Report contents

• Specific issues for power and utilities companies
• Expanded disclosures
  
• Effective dates and transition
• Impact on the organization

Download the document:

Revenue for power and utilities companies

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Handbook: Revenue recognition

Latest edition: Our in-depth guide to the revenue standard, ASC 606.

KPMG guides and publications relevant to FASB's revenue standard

In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues.

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