3. Summary of significant accounting policies (continued)
b. Change in accounting policy (continued)
v. Customer Contributions (continued)
There is no change in policy for revenue recognition of distribution customer contributions as a result of the implementation of IFRS 15.
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 deferred revenue. 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 deferred revenue until it is earned by the customer. Deferred revenue that are not returned to the customer are recognized as customer contribution revenue at the expiration of the eligible refund period.
There is no change in policy for revenue recognition of transmission customer contributions as a result of the implementation of IFRS 15.
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.
4. Natural gas in storage held for resale
As at September 30, 2018
As at March 31, 2018
Revaluation to net realizable value
The net realizable value of natural gas in storage at the end of the quarter was $17 million below cost (March 31, 2018 - $33 million below cost). As at September 30, 2018, the Corporation expected that $55 million of the current inventory value would be sold or consumed within the next year, and $7 million of the current inventory value would be sold or consumed after more than one year.
2018-19 SECOND QUARTER REPORT
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