Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 209

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1
Chunk 209
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 by requiring costs to be recognized only when uncertainty is resolved, and aligning capitalization rules with those for externally sold software.  Key changes include the elimination of distinct project stages for development, a redefined meaning of probable as likely, and requirements to assess significant development uncertainty for all software projects to determine when to capitalize costs.  In addition, the guidance specifies that the property, plant, and equipment disclosure requirements shall be applied to all capitalized software costs.  The amendments are effective for all public entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years.  Upon adoption, a public entity may apply the guidance using a prospective, retrospective, or modified transition approach.Effective Date for TVAThe new standard is effective for TVA's interim and annual reporting periods beginning October 1, 2028.Effect on the Financial Statements or Other Significant MattersThe adoption of this standard is not expected to have a material impact on TVA’s financial condition, results of operations, cash flows, or disclosures.

3.  Restructuring

TVA’s demand continues to grow, driving the need for significant future capital investment.  TVA must continue to drive efficiencies and cost savings across the enterprise to provide affordable, reliable electricity, while funding the capital investment needed to meet growing demand.  This effort has evolved into an Enterprise Transformation Program ("ETP") focused on improving financial health, enhancing asset performance, automating processes, optimizing third-party spend through supply chain, and making the workforce more efficient.  As part of these efforts, certain employees are eligible for severance payments.  These amounts are recognized in Operating and maintenance expense on TVA's Consolidated Statements of Operations in the period incurred.  Severance costs that have been incurred but not paid are included in Accounts payable and accrued liabilities on TVA's Consolidated Balance Sheets.  The organizational design efforts associated with the ETP were complete as of September 30, 2025; however, the ETP is ongoing as TVA executes the focus areas described above.  The table below summarizes the activity related to severance costs:Severance Cost Liability Activity(in millions)Severance cost liability at September 30, 2024$— Liabilities incurred during the period40 Actual costs paid during the period(29)Severance cost liability at September 30, 2025$11 

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4.  Accounts Receivable, Net

Accounts receivable primarily consist of amounts due from customers for power