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PART II
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Computing Arrangement, which adds guidance to help
entities evaluate the accounting treatment for cloud
computing arrangements. The ASU became eective for
PG&E Corporation and the Utility on January 1, 2016. PG&E
Corporation and the Utility have determined that this ASU
will not impact their consolidated financial statements and
related disclosures and will adopt this standard starting in
the first quarter of 2016.
Presentation of Debt Issuance Costs
In April 2015, the FASB issued ASU No. 2015-03, Interest -
Imputation of Interest (Subtopic 835-30): Simplifying the
Presentation of Debt Issuance Costs, which amends existing
presentation of debt issuance costs. PG&E Corporation
and the Utility currently disclose debt issuance costs in
current assets – other and noncurrent assets – other. The
amendments in this ASU, that became eective for PG&E
Corporation and the Utility on January 1, 2016, require that
debt issuance costs related to a recognized debt liability
be presented in the balance sheet as a direct deduction
from the carrying amount of that debt liability, consistent
with debt discounts. PG&E Corporation and the Utility will
adopt this standard in the first quarter of 2016 and do
not expect the reclassification to have a material impact
on their consolidated financial statements.
Revenue Recognition Standard
In May 2014, the FASB issued ASU No. 2014-09, Revenue from
Contracts with Customers, which amends existing revenue
recognition guidance. In August 2015, the FASB issued ASU
No. 2015-14, Revenue from Contracts with Customers (Topic
606): Deferral of the Eective Date, deferring the eective
date of this amendment for PG&E Corporation and the
Utility by one year to January 1, 2018, with early adoption
permitted as of the original eective date of January 1, 2017.
PG&E Corporation and the Utility are currently evaluating
the impact the guidance will have on their consolidated
financial statements and related disclosures.
NOTE 3: Regulatory Assets, Liabilities, and Balancing Accounts
Regulatory Assets
Long-term regulatory assets are comprised of the following:
(inmillions)
BalanceatDecember Recovery
Period
Pensionbenefits() Indefinitely()
Deferredincometaxes() years
Utilityretainedgeneration() years
Environmentalcompliancecosts() years
Priceriskmanagement() years
Electromechanicalmeters() --
Unamortizedlossnetofgainonreacquireddebt() years
Other Various
Totallong-termregulatoryassets
() Representsthecumulativedifferencesbetweenamountsrecognizedforratemakingpurposesandexpenseoraccumulated
othercomprehensiveincome(loss)recognizedinaccordancewithGAAP
() InconnectionwiththesettlementagreemententeredintoamongPG&ECorporationtheUtilityandtheCPUCinto
resolvetheUtility’sproceedingunderChaptertheCPUCauthorizedtheUtilitytorecoverbillionofcostsrelated
totheUtility’sretainedgenerationassetsTheindividualcomponentsoftheseregulatoryassetsarebeingamortizedover
therespectivelivesoftheunderlyinggenerationfacilitiesconsistentwiththeperiodoverwhichtherelatedrevenuesare
recognized
() Representstheexpectedfuturerecoveryofthenetbookvalueofelectromechanicalmetersthatwerereplacedwith
SmartMeter™devicesAsofDecembertheremainingbalanceofmillionisincludedincurrentregulatoryassets
ontheConsolidatedBalanceSheets
() PaymentsintothepensionandotherbenefitsplansarebasedonannualcontributionrequirementsAstheseannual
requirementscontinueindefinitelyintothefuturetheUtilityexpectstocontinuouslyrecoverpensionbenefits
In general, the Utility does not earn a return on regulatory assets if the related costs do not accrue interest. Accordingly,
the Utility earns a return only on its regulatory assets for retained generation, regulatory assets for electromechanical
meters, and regulatory assets for unamortized loss, net of gain, on reacquired debt.