PG&E 2014 Annual Report Download - page 95

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87
New Accounting Pronouncements
Revenue Recognition Standard
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue
from Contracts with Customers, which amends existing revenue recognition guidance. The accounting standards update will be
effective on 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:
Balance at December 31, Recovery
(in millions) 2014 2013 Period
Pension benets (1) $ 2,347 $ 1,444 N/A (4)
Deferred income taxes (1) 2,390 1,835 47 years
Utility retained generation (2) 456 503 11 years
Environmental compliance costs (1) 717 628 32 years
Price risk management (1) 127 106 10 years
Electromechanical meters (3) 70 135 2 years
Unamortized loss, net of gain, on reacquired debt (1) 113 135 12 years
Other 102 127 Various
Total long-term regulatory assets $ 6,322 $ 4,913
(1) Represents the cumulative differences between amounts recognized for ratemaking purposes and amounts recognized in accordance with GAAP. Pension
benefits also includes amounts that otherwise would be recorded to accumulated other comprehensive income/loss in the Consolidated Balance Sheets. (See
Note 11 below.)
(2) In connection with the settlement agreement entered into among PG&E Corporation, the Utility, and the CPUC in 2003 to resolve the Utility’s proceeding under
Chapter 11, the CPUC authorized the Utility to recover $1.2 billion of costs related to the Utility’s retained generation assets. The individual components of these
regulatory assets are being amortized over the respective lives of the underlying generation facilities, consistent with the period over which the related revenues
are recognized.
(3) Represents the expected future recovery of the net book value of electromechanical meters that were replaced with SmartMeter™ devices.
(4) The Utility expects to continuously recover pension benefits.
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.