v3.25.3
Accounting Policies and Recent Accounting Pronouncements
 9 Months Ended
Sep. 30, 2025
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Accounting Policies and Recent Accounting Pronouncements Accounting Policies and Recent Accounting Pronouncements
There have been no material changes in our significant accounting policies from those described in our combined 2024 Form 10-K.

Cash and Cash Equivalents and Restricted Cash

The table below provides a reconciliation of cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the amount reported in the Condensed Statements of Consolidated Cash Flows:

September 30, 2025December 31, 2024
CenterPoint EnergyHouston ElectricCERCCenterPoint EnergyHouston ElectricCERC
(in millions)
Cash and cash equivalents (1)$37 $17 $— $24 $14 $2 
Restricted cash included in Prepaid expenses and other current assets (2)
8 2 — 6 — — 
Total cash, cash equivalents and restricted cash shown in Condensed Statements of Consolidated Cash Flows$45 $19 $— $30 $14 $2 

(1)Cash and cash equivalents related to VIEs as of September 30, 2025 and December 31, 2024 included $31 million and $21 million, respectively, at CenterPoint Energy and $15 million and $14 million, respectively, at Houston Electric.
(2)Restricted cash primarily related to accounts established by CenterPoint Energy in connection with the issuance of the Securitization Bonds to collateralize the Securitization Bonds that were issued in these financing transactions. These restricted cash accounts are not available for withdrawal until the maturity of the Securitization Bonds.

Goodwill (CenterPoint Energy and CERC)

CenterPoint Energy and CERC perform goodwill impairment tests at least annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. Goodwill is evaluated for impairment by performing a qualitative assessment or using a quantitative test. If we choose to perform a qualitative assessment and determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative test is then performed; otherwise, no further testing is required. The quantitative test, if required, is performed by comparing the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. The estimated fair value of the reporting unit is primarily determined based on an income approach or a weighted combination of income and market
approaches. When the carrying amount is in excess of the estimated fair value of the reporting unit, the excess amount is recorded as an impairment charge, not to exceed the carrying amount of goodwill. CenterPoint Energy and CERC performed their annual goodwill impairment tests in the third quarter of 2025 and determined that no goodwill impairment charge was required for any reporting unit as a result of those tests.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). This ASU enhances the transparency of income tax disclosures related to rate reconciliation and income taxes. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Registrants plan to adopt this ASU on December 31, 2025, on a retrospective basis. The adoption of this ASU is not expected to have an impact on our consolidated financial statements; however, it is expected to result in additional footnote disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures (“ASU 2024-03”). This ASU improves disclosure of a public business entity’s expense by requiring disaggregated disclosure of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Registrants are currently evaluating the impact of this ASU on their respective consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). This ASU modernizes the accounting for software costs to adapt to an incremental and iterative software development method. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and may be applied using a prospective, modified prospective or retrospective transition approach. The Registrants are currently evaluating the impact of this ASU on their respective consolidated financial statements.

Management believes that all other recently adopted and recently issued accounting standards that are not yet effective will not have a material impact on the Registrants’ financial position, results of operations or cash flows upon adoption.