Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 94

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 94
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 respectively, at September 30, 2025.  The total lease obligations included in Accounts payable and accrued liabilities, Other long-term liabilities, and Finance lease liabilities related to these agreements were $550 million and $121 million for finance and operating leases, respectively, at September 30, 2024.     TVA has agreements with lease and non-lease components and has elected to separate lease and non-lease components.  Consideration is allocated to lease and non-lease components generally based on relative standalone price basis.  Variable lease costs included in the agreements are allocated based on the determination of lease and non-lease components.    TVA has lease agreements which include options for renewal and early termination.  The intent to renew a lease varies depending on the lease type and asset.  Renewal options that are reasonably certain to be exercised are included in the lease measurements.  The decision to terminate a lease early is dependent on various economic factors.  No termination options have been included in TVA's lease measurements.          Leases with an initial term of 12 months or less, which do not include an option to extend the initial term of the lease to greater than 12 months that TVA is reasonably certain to exercise, are not recorded on the Consolidated Balance Sheets at September 30, 2025.     Operating leases are recognized on a straight-line basis over the term of the lease agreement.  Rent expense associated with short-term leases and variable leases is recorded in Operating and maintenance expense, Fuel expense, or Purchased power expense on the Consolidated Statements of Operations.  Expenses associated with finance leases result in the separate presentation of interest expense on the lease liability and amortization expense of the related lease asset on the Consolidated Statements of Operations.Decommissioning Costs    TVA recognizes legal obligations associated with the future retirement of certain tangible long-lived assets.  These obligations relate to fossil fuel-fired generating plants, nuclear generating plants, hydroelectric generating plants/dams, transmission structures, and other property-related assets.  Activities involved with retiring these assets could include decontamination and demolition of structures, removal and disposal of wastes, and site restoration.  Revisions to the forecasted costs of decommissioning activities are made whenever factors indicate that the timing or amounts of estimated cash flows have changed materially.  Studies are updated for both nuclear and non-nuclear decommissioning costs at least every five years.  Any accretion or depreciation expense related to these liabilities and assets