Contributions in Aid of Construction
Under construction contracts with real estate developers and others, the Company’s utility
subsidiaries may receive non-refundable advances for the cost of installing new water mains.
These advances are recorded as CIAC. The Company’s utility subsidiaries also record to plant
and CIAC the fair market value of developer installed mains and any excess of fair market
value over the cost of community water systems purchased from developers. CIAC are
amortized over the life of the related properties.
Paycheck Protection Program Loan
The Company accounts for its Paycheck Protection Program (PPP) loan in accordance with
the guidelines established by the Financial Accounting Standards Board (FASB) ASC 470, Debt.
The guidance requires the company to account for the proceeds from the PPP loan as debt
and apply interest considering the ten-month interest payment deferral allowed for the loan.
The loan and accrued interest may be forgivable after eight or twenty-four weeks if the loan
proceeds are used for eligible purposes. The Company has elected to report the PPP loan as
long-term debt. No income will be recognized from the extinguishment of the PPP debt
(whether as a result of forgiveness or otherwise) until the Company has been legally released
as the primary obligor of the loan.
Revenue Recognition — Regulated Entities
Standard charges for water utility services to customers are recorded as revenue, based upon
meter readings and contract service, as services are provided. The majority of the Company's
water revenues are based on rates approved by the NHPUC. Estimates of unbilled service
revenues are recorded in the period the services are provided. Provision is made in the
consolidated financial statements for estimated uncollectible accounts.
Revenue Recognition - Non-Regulated Entities
The Company derives its non-regulated revenues primarily from water management services
which include contract operations and maintenance, and water testing and billing services to
municipalities and small, privately owned community water systems. Revenue is measured
based on consideration specified in contracts with customers. The Company recognizes
revenue when it satisfies performance obligations under the terms of the contract which
generally occurs with the transfer of control of the services to the customer. Revenues from
unplanned additional work are based upon time and materials incurred in connection with
activities not specifically identified in the contract, or for which work levels exceed contracted
amounts.
Revenues from real estate operations, other than undistributed earnings or losses from
equity method joint ventures, are recorded upon completion of a sale of real property. The
Company’s real estate holdings outside of the Company's utility subsidiaries are comprised
primarily of undeveloped land.
The Company does not have any significant financing components as payment is received at
or shortly after the point of sale.
103
