New Accounting Standards
Accounting for Government Grants
In December 2025, the Financial Accounting Standards Board (FASB) issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (ASU 2025-10), which provides guidance on recognition, measurement, and presentation of government grants. ASU 2025-10 is effective for annual periods beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted the amendments in this ASU for its fiscal year ended December 31, 2025. The adoption did not have a material impact on the consolidated financial statements as we previously accounted for ITCs and PTCs by analogy to International Accounting Standards 20, Accounting for Government Grants and Disclosures of Government Assistance, which the FASB largely leveraged in developing the ASU.
Derivatives Scope Refinements
In September 2025, the FASB issued ASU No. 2025-07 (ASU 2025-07), Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The amendments in the ASU exclude from derivative accounting certain non-exchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. The amendments also clarify that an entity should apply the guidance in Topic 606, including the guidance on non-cash consideration, to a contract with share-based non-cash consideration from a customer for the transfer of goods or services. The amendments are effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company adopted the amendments in ASU 2025-07 prospectively for its fiscal year ended December 31, 2025 which resulted in certain wholesale contracts being excluded from derivative accounting.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU No. 2023-09 (ASU 2023-09), Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for its fiscal year ended December 31, 2025 and applied the new disclosure requirements in Note 6 on a retrospective basis.
Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU No. 2024-03 (ASU 2024-03), Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve disclosures by providing additional information about certain expenses in the notes to financial statements in interim and annual reporting periods. Among other provisions, the new standard requires disclosure of disaggregated amounts for expenses such as employee compensation, depreciation, and intangible asset amortization included in each expense caption presented on the face of the income statement. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027 and can be applied prospectively or retrospectively. Early adoption is permitted. We are currently evaluating the impact this ASU will have on the consolidated financial statements and related disclosures.
Recent Developments
Debt, Credit Facilities, and Financing
Vistra Operations Senior Secured Notes — In January 2026, Vistra Operations issued $2.25 billion aggregate principal amount of senior secured notes, consisting of $1.0 billion aggregate principal amount of 4.700% senior secured notes due 2031 and $1.25 billion aggregate principal amount of 5.350% senior secured notes due 2036 in an offering to eligible purchasers under Rule 144A and Regulation S under the Securities Act. See Note 11 for additional information.