Exelon 2015 Annual Report Download - page 246

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Capitalized Software Costs (Exelon, Generation, ComEd, PECO and BGE)
Costs incurred during the application development stage of software projects that are internally developed or purchased for operational use
are capitalized within property, plant, and equipment. Such capitalized amounts are amortized ratably over the expected lives of the projects when
they become operational, generally not to exceed five years. Certain other capitalized software costs are being amortized over longer lives based
on the expected life or pursuant to prescribed regulatory requirements. The following table presents net unamortized capitalized software costs and
amortization of capitalized software costs by year:
Net unamortized software costs Exelon Generation ComEd PECO BGE
December 31, 2015 $ 633 $ 180 $ 172 $ 86 $178
December 31, 2014 596 193 133 84 163
Amortization of capitalized software costs Exelon Generation ComEd PECO BGE
2015 $ 208 $ 73 $ 47 $ 33 $ 46
2014 186 59 45 28 43
2013 198 67 52 33 36
Depreciation, Depletion and Amortization (Exelon, Generation, ComEd, PECO and BGE)
Except for the amortization of nuclear fuel, depreciation is generally recorded over the estimated service lives of property, plant and
equipment on a straight-line basis using the composite method. ComEd’s and BGE’s depreciation includes a provision for estimated removal costs
as authorized by the respective regulators. The estimated service lives for ComEd, PECO and BGE are primarily based on the average service
lives from the most recent depreciation study for each respective company. The estimated service lives of the nuclear-fuel generating facilities are
based on the remaining useful lives of the stations, which assume a 20-year license renewal extension of the operating licenses (to the extent that
such renewal has not yet been granted) for all of Generation’s operating nuclear generating stations except for Oyster Creek. The estimated
service lives of the hydroelectric generating facilities are based on the remaining useful lives of the stations, which assume a license renewal
extension of the operating licenses. The estimated service lives of the fossil fuel and other renewable generating facilities are based on the
remaining useful lives of the stations, which Generation periodically evaluates based on feasibility assessments taking into account economic and
capital requirement considerations.
See Note 7—Property, Plant and Equipment for further information regarding depreciation.
Depletion of oil and gas exploration and production activities is recorded using the units-of-production method over the remaining life of the
estimated proved reserves at the field level for acquisition costs and over the remaining life of proved developed reserves at the field level for
development costs. The estimates for oil and gas reserves are based on internal calculations.
Amortization of regulatory assets and liabilities are recorded over the recovery or refund period specified in the related legislation or
regulatory agreement. When the recovery or refund period is less than one year, amortization is recorded to the line item in which the deferred cost
or income would have originally been recorded in the Registrants’ Consolidated Statements of Operations and Comprehensive Income.
Amortization of ComEd’s distribution formula rate regulatory asset and ComEd’s and BGE’s transmission formula rate regulatory assets is
recorded to Operating revenues.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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