SASKENERGY 2018-19 ANNUAL REPORT
vii.Contract liabilities Advance receipt of customer capital contributions are recorded as a contract liability, as billing occurs prior to the construction of the associated customer facility. At the in-service date a construction cost true-up is determined, with either a rebate issued to the customer or additional customer capital contribution collected from the customer. The contract liabilities are recognized as revenue at the in-service date of the customer facility with the exception of the potentially refundable amount over the applicable refund period. The refund period is generally over five years. viii.Refund liabilities At the construction in-service date of a customer facility, a portion of the customer capital contribution may be refundable to the customer over a five year refund period, if the customer meets or exceeds a predetermined flow of natural gas. At the in-service date, the potential refund remaining over the five year refund period is no longer presented as a contract liability but is presented as a refund liability. Annually, the actual volume of natural gas flowed is compared to the predetermined flow and the annual rebate is paid to the customer if actual flow exceeds the predetermined flow amount. In contrast, if the actual flow is less than the predetermined flow, the rebate is recorded as customer contribution revenue. ix. Impact of application of IFRS 15 Revenue from Contracts with Customers Under the new standard, revenue is accelerated, which has been recognized in opening retained earnings for contracts with in-service dates prior to April 1, 2018. At the in-service date of projects completed after April 1, 2018, revenue is recognized in the statement of comprehensive income, including that portion allocated to future transportation revenue. As the customer has not yet paid for their transportation services, an account receivable is recorded on the statement of financial position. The effect of IFRS 15 on the statement of financial position is as follows:
APRIL 1, 2018
Excluding the Impact of IFRS 15
IFRS 15 Impact
As Reported
(millions)
ASSETS Current assets
10 $
151
Accounts receivable
$
141 $
LIABILITIES Current liabilities
-
Deferred revenue Contract liability Refund liability
35
(35)
13
- -
13
8
8
21
35
(14)
PROVINCE’S EQUITY Retained earnings
24 $
918
$
894 $
IFRS 15 requires that amounts contingently billable and collectible in the future be recognized as revenue to the extent that the performance obligation to the customer has been satisfied. The difference between the revenue recognized and the amount collected/collectible from the customer is recognized on the statement of financial position as an account receivable.
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