Chevron Corp. (CVX)

Chevron accounts for each delivery order of crude oil, natural gas, petroleum and chemical products as a separate performance obligation. Revenue is recognized when the performance obligation is satisfied, which typically occurs at the point in time when control of the product transfers to the customer. Payment is generally due within 30 days of delivery. Chevron accounts for delivery transportation as a fulfillment cost, not a separate performance obligation, and recognizes these costs as an operating expense in the period when revenue for the related commodity is recognized.

Revenue is measured as the amount Chevron expects to receive in exchange for transferring commodities to the customer. Chevron’s commodity sales are typically based on prevailing market-based prices and may include discounts and allowances. Until market prices become known under terms of Chevron’s contracts, the transaction price included in revenue is based on Chevron’s estimate of the most likely outcome.

Discounts and allowances are estimated using a combination of historical and recent data trends. When deliveries contain multiple products, an observable standalone selling price is generally used to measure revenue for each product. Chevron includes estimates in the transaction price only to the extent that a significant reversal of revenue is not probable in subsequent periods.

Excise, value-added and similar taxes assessed by a governmental authority on a revenue-producing transaction between a seller and a customer are presented on a net basis in "Taxes other than on income" on the Consolidated Statement of Income, on page 50. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another (including buy/sell arrangements) are combined and recorded on a net basis and reported in “Purchased crude oil and products” on the Consolidated Statement of Income.

Prior to the adoption of ASC 606 on January 1, 2018, revenues associated with sales of crude oil, natural gas, petroleum and chemicals products, and all other sources were recorded when title passed to the customer, net of royalties, discounts and allowances, as applicable. Revenues from natural gas production from properties in which Chevron has an interest with other producers were generally recognized using the entitlement method. Excise, value-added and similar taxes assessed by a governmental authority on a revenue-producing transaction between a seller and a customer were presented on a gross basis on the Consolidated Statement of Income.

Source: 10-K (filing date: 2019-02-22).

Chevron Corp., Income Statement, Revenues

US$ in millions

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	United States
	International
	Upstream
	United States
	International
	Downstream
	United States
	International
	All other
	Sales and other operating revenues

Based on: 10-K (filing date: 2019-02-22), 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-20).