Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 405

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 405
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 Long-term project cost accruals represent the unpaid liability associated with major construction projects and other project expenditures.  TVA accrues these costs based on level of completion of the vendor's performance obligation, and the long-term portion represents amounts that will not be paid within the next 12 months.  The current and long-term portions of Long-term project cost accruals are reported in Accounts payable and accrued liabilities and Other long-term liabilities, respectively, on TVA's Consolidated Balance Sheets.  At September 30, 2025 and 2024, the current amount of the long-term project cost accruals reported in Accounts payable and accrued liabilities was $256 million and $124 million, respectively.      

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Currency Swap Liabilities.  To protect against exchange rate risk related to British pound sterling denominated Bond transactions, TVA entered into foreign currency hedges.  The values of these derivatives are included in Accounts payable and accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets.  See Note 16 — Risk Management Activities and Derivative Transactions — Overview of Accounting Treatment and Cash Flow Hedging Strategy for Currency Swaps for more information regarding the currency swap liabilities.  Operating Lease Liabilities.  TVA's operating leases consist primarily of railcars, equipment, real estate/land, and power generating facilities.  At September 30, 2025 and 2024, the current portion of TVA's operating leases reported in Accounts payable and accrued liabilities was $46 million and $63 million, respectively.  See Note 9 — Leases for more information regarding leases.Advances for Construction.  TVA receives refundable and non-refundable advances for construction that are generally intended to defray all or a portion of the costs of building or extending TVA’s existing power assets.  Amounts received are deferred as a liability with the long-term portion representing amounts that will not be recognized within the next 12 months.  As projects meet milestones or other contractual obligations, the refundable portion is refunded to the customer and the non-refundable portion is recognized as contributions in aid of construction and offsets the cost of plant assets.   At September 30, 2025 and 2024, the current amount of advances for construction recorded in Accounts payable and accrued liabilities was $155 million and $60 million, respectively.Long-Term Deferred Compensation.  TVA provides compensation arrangements to engage and retain certain employees, both executive and non-executive, which are designed