Power & Utilities Spotlight: A series focused on power and utilities accounting standards

The Power & Utilities Spotlight series analyzes important power and utilities accounting standards, such as new Financial Accounting Standards Board (FASB) pronouncements or exposure drafts and concise examples and answers to frequently asked questions that assist readers in understanding and implementing the critical guidance.

Review of power and utilities adopters of the new revenue standard is issued


As a result of the recognition and measurement guidance in ASC 606, some power and utilities companies have made changes to their financial statements. For many, the effect of the new requirements has not been significant. However, all power and utilities entities have needed to carefully consider the standard’s new and modified quantitative and qualitative disclosure guidance, which has significantly increased the amount of information that companies must disclose about revenue activities and related transactions.

As power and utilities entities adopting the standard in 2018 continue to refine their disclosures, they may benefit from evaluating the disclosure trends we have observed through our review.

The bottom line

  • For most filers that we reviewed in the power and utility industry, the new and comprehensive disclosure requirements were the most significant change that resulted from the adoption of ASC 606.
  • We observed diversity in the type and amount of information entities disclosed.
  • Most of the filers reviewed chose to add a separate and specific revenue footnote that contains the required disclosures.
  • When providing disaggregated revenue disclosures, most filers reviewed used three or fewer categories. The most commonly selected categories were (1) product line (electric, gas, etc.) and (2) type of customer (residential, commercial, industrial, etc.).
  • The most common practical expedient chosen by P&U adopters was the invoicing practical expedient.
  • Many filers separately disclosed alternative revenue programs and their associated policies.
  • To the extent that the accounting standard setters clarify guidance and regulators issue more comments, we expect entities to continue to refine the information they disclose.

Beyond the bottom line

This spotlight provides insight into Deloitte’s review of the disclosures in the public filings of a group of power and utilities companies that adopted FASB’s new revenue standard (ASC 606)1 in the first quarter of 2018. Public utilities entities may benefit from evaluating the disclosure trends we have observed as a result of this review.2

1 FASB Accounting Standards Codification Topic 606, Revenue From Contracts With Customers.

2 Public business entities reporting under US GAAP are required to adopt the new revenue standard for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2017. Early adoption is permitted as of reporting periods (including interim periods) beginning after December 15, 2016. For nonpublic entities, the new revenue standard is effective for annual periods beginning after December 15, 2018, and early adoption is also permitted. For additional discussion of companies’ disclosures about the implementation of the new standard, see Deloitte’s November 21, 2017, Heads Up.

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