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Revenue from Contract with Customer: | 3 Months Ended
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Mar. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer | Revenues from Contracts with Customers Most of Registrant's revenues are derived from contracts with customers, including tariff-based revenues from its regulated utilities. The adoption of the new revenue recognition accounting standard, "Revenue from Contracts with Customers - (Topic 606)," did not have a material impact on Registrant's measurement or timing of revenue recognition. GSWC's performance obligations for its water and electric utility operations involve providing water and electric utility services to customers. The transaction prices for water and electric revenues are based on tariff rates authorized by the CPUC, which have both quantity and flat charges. Tariff revenues represent the adopted revenue requirement authorized by the CPUC intended to provide GSWC with a reasonable opportunity to recover its costs and earn a return on its net capital investment. The annual revenue requirements are comprised of authorized operation and maintenance costs, administrative and general costs, depreciation, taxes and a return on rate base consistent with the authorized capital structure. Water and electric revenues are recognized over time as customers simultaneously receive and use the utility services provided. Water and electric revenues include amounts billed to customers on a cycle basis based on meter readings for services provided. Customer bills also include surcharges for cost-recovery activities, which represent CPUC-authorized balancing and memorandum accounts that allow for the recovery of previously incurred operating costs. Revenues from these surcharges result in no impact to earnings as they are offset by corresponding increases in operating expenses to reflect the recovery of the associated costs. Customer payment terms are approximately 20 business days from the billing date. Unbilled revenues are amounts estimated to be billed for usage since the last meter-reading date to the end of the accounting period. Historical customer usage forms the basis for estimating unbilled revenue. GSWC bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which GSWC pays to various municipalities (based on their ordinances) in order to use public rights of way for utility purposes. GSWC bills these franchise fees to its customers based on a CPUC-authorized rate for each ratemaking area as applicable. These franchise fees, which are required to be paid regardless of GSWC’s ability to collect them from its customers, are accounted for on a gross basis. GSWC’s franchise fees billed to customers and recorded as operating revenue were approximately $853,000 and $827,000 for the three months ended March 31, 2018 and 2017, respectively. When GSWC acts as an agent, and a tax is not required to be remitted if it is not collected from customers, the tax is accounted for on a net basis. GSWC revenues tracked under the Water Revenue Adjustment Mechanism (“WRAM”) regulatory accounts for its water segment, and the Base Revenue Requirement Adjustment Mechanism ("BRRAM") regulatory account for its electric segment, are alternative revenue programs accounted for under Accounting Standards Codification ("ASC") Topic 980, Regulated Operations. For ASUS, performance obligations consist of: (i) performing ongoing operation and maintenance of the water and/or wastewater systems for each military base served, and (ii) performing construction activities (including renewal and replacement capital work) on each military base served. The transaction price for each of ASUS's performance obligations is either delineated in, or initially derived from, each 50-year contract and/or any subsequent contract modifications. Depending on the state in which their operations are conducted, the Military Utility Privatization Subsidiaries are also subject to certain state non-income tax assessments, which are accounted for on a gross basis and have been immaterial to date. The ongoing performance of operation and maintenance of the water and/or wastewater systems is viewed as a single performance obligation for each 50-year contract with the U.S. government. Registrant recognizes revenue for operations and maintenance fees monthly using the "right to invoice" practical expedient under ASC Topic 606. ASUS has a right to consideration from the U.S. government in an amount that corresponds directly with the value to the U.S. government of ASUS’s performance completed to date. The contractual operations and maintenance fees are firm-fixed, and the level of effort or resources expended in the performance of the operations-and-maintenance-fees performance obligation is largely consistent over the 50-year term. Therefore, Registrant has determined that the monthly amounts invoiced for operations and maintenance performance are a fair reflection of the value transferred to the U.S. government. Invoices to the U.S. government for operations and maintenance service, as well as construction activities, are due upon receipt. ASUS's construction activities consist of various projects to be performed. Each of these projects' transaction prices is delineated in either the 50-year contract or through a specific contract modification for each construction project, which includes the transaction price for that project. Each construction project is viewed as a separate, single performance obligation. Therefore, it is generally not necessary to allocate a construction transaction price to more than one construction performance obligation. Revenues for construction activities are recognized over time, with progress toward completion measured based on the input method using costs incurred relative to the total estimated costs (cost-to-cost method). Due to the nature of these construction projects, Registrant has determined cost-to-cost input measurement to be the best method to measure progress towards satisfying its construction contract performance obligations, as compared to using an output measurement such as units produced. Changes in job performance, job site conditions, change orders and/or estimated profitability may result in revisions to costs and income for ASUS, and are recognized in the period in which any such revisions are determined. Pre-contract costs for ASUS, which consist of design and engineering labor costs, are deferred if recovery is probable, and are expensed as incurred if recovery is not probable. Deferred pre-contract costs have been immaterial to date. Contracted services revenues recognized during the three months ended March 31, 2018 from performance obligations satisfied in previous periods were not material. Although GSWC has a diversified base of residential, commercial, industrial and other customers, revenues derived from residential and commercial customers accounted for approximately 90% and 85% of total water and electric revenues, respectively, during the three months ended March 31, 2018. For the three months ended March 31, 2018, disaggregated revenues from contracts with customers by segment are as follows:
(dollar in thousands) |  | Three Months Ended March 31, 2018
Water: |  |
Tariff-based revenues |  | $ | 65,775 |
Surcharges (cost-recovery activities) |  | 793 |
Other |  | 442 |
Water revenues from contracts with customers |  | 67,010 |
WRAM over-collection (alternative revenue program) |  | (2,598 | )
Total water revenues |  | 64,412 |
Electric: |  |
Tariff-based revenues |  | 10,019 |
Surcharges (cost-recovery activities) |  | 47 |
Electric revenues from contracts with customers |  | 10,066 |
BRRAM over-collection (alternative revenue program) |  | (234 | )
Total electric revenues |  | 9,832 |
Contracted services: |  |
Water |  | 13,000 |
Wastewater |  | 7,484 |
Contracted services revenues from contracts with customers |  | 20,484 |
Total revenues |  | $ | 94,728 |
The opening and closing balances of receivable from the U.S. government, contract assets and contract liabilities from contracts with customers, which related entirely to ASUS, are as follows:
(dollar in thousands) |  | March 31, 2018 |  | January 1, 2018
Receivable from the U.S. government |  | $ | 48,383 |  |  | $ | 40,150 |
Contract assets |  | $ | 22,565 |  |  | $ | 30,388 |
Contract liabilities |  | $ | 6,583 |  |  | $ | 3,911 |
As a result of the adoption of ASC Topic 606, amounts previously reported under "Costs and estimated earnings in excess of billings on contracts" are now reflected as either "Receivable from U.S. government" or "Contract assets," depending on whether receipt of these amounts is conditional on something other than the passage of time. Amounts previously reported under "Billings in excess of costs and estimated earnings on contracts" are now reflected as "Contract liabilities." Contract Assets - Contract assets are those of ASUS and consist of unbilled revenues recognized from work-in-progress construction projects, where the right to payment is conditional on something other than the passage of time. The classification of this asset as current or noncurrent is based on the timing of when ASUS expects to bill these amounts. Contract Liabilities - Contract liabilities are those of ASUS and consist of billings in excess of revenue recognized. The classification of this liability as current or noncurrent is based on the timing of when ASUS expects to recognize revenue. Revenue for the three months ended March 31, 2018, which was included in contract liabilities at the beginning of the period was not material. As of March 31, 2018, Registrant's aggregate remaining performance obligations, which consists entirely of the contracted services segment, was $3.1 billion. Registrant expects to recognize revenue on these remaining performance obligations over the remaining term of each of the 50-year contracts, which range from 37 to 50 years.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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