3. Summary of significant accounting policies (continued)
c. Change in accounting policy (continued)
v. Customer Contributions
The Corporation builds customer requested distribution and transmission facilities and the title and risks/rewards of these facilities remain with the Corporation at all times including during construction as backed by the SaskEnergy Act. Any use or benefit that the customer obtains is not during the construction period, but thereafter when the connection is made to the customer’s property, and at that point the customer can use and benefit from the readily available gas. Performance obligations are satisfied at the point in time when the customer specific facility connection is available for use by the Corporation and the service lines are available for the customer’s operations. The performance obligation would be satisfied at the in-service date of the distribution and transmission customer specific facilities and revenue recognized. Customer contributions received in advance of construction are initially recorded as a contract liability as they are generally paid prior to construction commencing. These balances are considered variable consideration and are fully constrained. The transaction prices included in the contract with the customer are allocated to the performance obligation based on the specific facility requests by the customer being made available for use. Distribution service customer contributions With respect to distribution customer specific facilities, customers agree to pay at the in-service date, to the Corporation, the sum detailed on the contract with regard to the capital cost of assets which provide distribution services to the contributing customer. Contracts generally require the customer to pay all or a portion of the contract cost in advance, in which case the Corporation records the deposit as contract liabilities until the point in time that the related assets are available for use. The Corporation may refund to a customer a portion of the contributions depending on the volume of gas the customer may consume over a specific period of time.
The Corporation has adopted IFRS 15 and the impacts are not material to distribution customer contributions.
Transmission service customer contributions With respect to transmission customer specific facilities, customers agree to pay in advance to the Corporation, the sum detailed on the contract with regard to the capital cost of assets which provide transmission services to the contributing customer. The transmission customer contributions that are paid in advance of construction are initially recorded as a contract liability. The contributions received, less potential refunds, are recognized into revenue at the point in time the related assets are available for use. The Corporation may provide a refund to a customer for some or all of the contributions made depending on the volume of gas transported through the system. There is a refund period on contributions received and the amount of contributions expected to be refunded are estimated and recorded as a refund liability until it is earned by the customer. Refund liabilities that are not returned to the customer are recognized as customer contribution revenue at the expiration of the eligible refund period.
The Corporation has adopted IFRS 15 and the impacts are not material to transmission customer contributions.
vi. Government grants
Government grants are recognized at fair value as deferred revenue when the Corporation meets the criteria specified in the grant and the grant is deemed receivable from the government entity. Grants relating to expenses are recognized in net income on a systematic basis in the same periods the expenses are incurred. Grants relating to the Corporation’s assets are recognized into net income on a straight line basis over the useful life of the related asset.
There is no change in policy for revenue recognition of government grants as a result of the implementation of IFRS 15.
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2018-19 THIRD QUARTER REPORT
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