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SEC Filings
10-Q
TERRAFORM POWER, INC. filed this Form 10-Q on 05/21/2018
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Topic 606 Adoption Impact on Unaudited Condensed Consolidated Balance Sheet
 
 
As of March 31, 2018
 
 
As
Reported
 
Adjustments
 
Amounts excluding Topic 606 Adoption
(In thousands)
 
 
REC Sales
 
ITC Sales
 
Accounts receivable, net
 
$
70,346

 
$
22,715

 
$

 
$
93,061

Other current assets
 
253,197

 

 

 
253,197

Total current assets
 
323,543

 
22,715

 

 
346,258

Non-current assets
 
5,935,238

 

 

 
5,935,238

Total assets
 
$
6,258,781

 
$
22,715

 
$

 
$
6,281,496

 
 
 
 
 
 
 
 
 
Deferred revenue
 
$
1,807

 
$

 
$
16,310

 
$
18,117

Other current liabilities
 
502,464

 

 

 
502,464

Total current liabilities
 
504,271

 

 
16,310

 
520,581

Deferred revenue, less current portion
 
13,134

 

 
21,069

 
34,203

Other non-current liabilities
 
3,411,266

 

 

 
3,411,266

Total liabilities
 
3,928,671

 

 
37,379

 
3,966,050

Redeemable non-controlling interests and total stockholders' equity
 
2,330,110

 
22,715

 
(37,379
)
 
2,315,446

Total liabilities, redeemable non-controlling interests and stockholders' equity
 
$
6,258,781

 
$
22,715

 
$

 
$
6,281,496


PPA rental income

The majority of the Company’s energy revenue is derived from long-term PPAs accounted for as operating leases under ASC 840, Leases. Rental income under these leases is recorded as revenue when the electricity is delivered. The Company will adopt ASC 842, Leases on January 1, 2019. The Company is currently working through an adoption plan which includes the evaluation of lease contracts compared to the new standard and may elect certain of the practical expedients permitted in the issued standard, including the expedient that permits the Company to retain its existing lease assessment and classification.

Commodity derivatives

The Company has certain revenue contracts within its wind fleet that are accounted for as derivatives under the scope of ASC 815, Derivatives and Hedging. Amounts recognized within operating revenues, net in the unaudited condensed consolidated statements of operations consist of cash settlements and unrealized gains and losses representing changes in fair value for the commodity derivatives that are not designated as hedging instruments. See Note 10. Derivatives for further discussion.

PPA revenue

PPAs that are not accounted for under the scope of leases or derivatives are accounted for under Topic 606. The Company typically delivers bundled goods consisting of energy and incentive products for a singular rate based on a unit of generation at a specified facility over the term of the agreement. In these type of arrangements, volume reflects total energy generation measured in kilowatt hours (“kWhs”) which can vary period to period depending on system and resource availability. The contract rate per unit of generation (kWhs) is generally fixed at contract inception; however, certain pricing arrangements can provide for time-of-delivery, seasonal or market index adjustment mechanisms over time. The customer is invoiced monthly equal to the volume of energy delivered multiplied by the applicable contract rate.

The Company considers bundled energy and incentive products within PPAs to be distinct performance obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied under Topic 606. The Company views the sale of energy as a series of distinct goods that is


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