XML 99 R11.htm IDEA: XBRL DOCUMENT v3.22.2.2
Impact of New Accounting Standards and Interpretations
 12 Months Ended
Sep. 30, 2022
Accounting Changes and Error Corrections [Abstract]  
Accounting Standards Update and Change in Accounting Principle [Text Block] Impact of New Accounting Standards and Interpretations
    The following are accounting standard updates issued by the Financial Accounting Standards Board ("FASB") that TVA adopted during 2022:
Lessor-Certain Leases with Variable Lease Payments
Description
This guidance amends the lessor lease classification for leases that have variable lease payments that are not based on an index or rate. If the lease meets the criteria for classification as either (1) a sale-type or (2) a direct finance lease, and application of the lease guidance would result in recognition of a day-one selling loss, then the lease should be classified as an operating lease.

There are two transition methods provided by the guidance for entities that have adopted the standard:

•Retrospective application to leases that commenced or were modified after the beginning of the period in which the standard was adopted, or
•Prospective application to leases that commence or are modified subsequent to the date that amendments in the guidance are first applied.
Effective Date for TVAOctober 1, 2021
Effect on the Financial Statements or Other Significant MattersTVA adopted this standard on a prospective basis. Adoption of this standard did not have a material
impact on TVA's financial condition, results of operations, or cash flows.
Reference Rate Reform
DescriptionThis guidance provides temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rates ("SOFR").
Effective Date for TVADecember 31, 2021
Effect on the Financial Statements or Other Significant Matters
TVA had interest rate swap contracts that totaled a notional value of $1.5 billion at December 31, 2021,
that were indexed to LIBOR. TVA adopted the International Swaps and Derivative Association’s
("ISDA’s") LIBOR fallback protocol for interest rate swaps prior to December 31, 2021. Under this
protocol, U.S. dollar LIBOR transactions would fall back to the SOFR upon cessation of the related
LIBOR publication. The interest rate swap contracts did not receive hedge accounting treatment, and
therefore TVA did not elect any optional expedients for this modification. TVA does not have any other
significant contracts, including lease agreements, that include payments indexed to LIBOR. Therefore,
the change of reference rate did not have a material impact on TVA’s financial condition, results of
operations, or cash flows.

The following accounting standards have been issued but as of September 30, 2022, were not effective and had not been adopted by TVA:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
DescriptionThis guidance requires an entity (acquirer) to recognize and measure contract assets and contract
liabilities acquired in a business combination in accordance with revenue with customers. It is
expected that an acquirer will generally recognize and measure acquired contract assets and contract
liabilities in a manner consistent with how the acquiree recognized and measured contract assets and
contract liabilities in the acquiree’s financial statement. The entity should apply the standard prospectively to business combinations occurring on or after the effective date of the standard.
Effective Date for TVAThis new standard is effective for TVA’s interim and annual reporting periods beginning October 1,
2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early.
Effect on the Financial Statements or Other Significant MattersTVA does not expect the adoption of this standard to have a material impact on its financial condition,
results of operations, or cash flows.

Troubled Debt Restructurings and Vintage Disclosures
DescriptionThis guidance eliminates the recognition and measurement guidance on troubled debt restructuring for
creditors that have adopted Financial Instruments-Credit Losses and requires enhanced disclosures
about loan modifications for borrowers experiencing financial difficulty. Additionally, the guidance
requires public business entities to present current-period gross write-offs by year of origination in their
vintage disclosures. The entity should apply the standard prospectively except for the transition method related to the recognition and measurement of troubled debt restructuring. For the transition method, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative-effect adjustment to retained earnings in the period of adoption.
Effective Date for TVAThis new standard is effective for TVA’s interim and annual reporting periods beginning October 1,
2023. While early adoption is permitted, TVA does not currently plan to adopt this standard early.
Effect on the Financial Statements or Other Significant MattersTVA does not expect the adoption of this standard to have a material impact on its financial condition,
results of operations, or cash flows.