v3.26.1
Recent Accounting Pronouncements
 6 Months Ended
Jun. 30, 2026
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements

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Recent Accounting Pronouncements

New Standards Issued Not Yet Adopted

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As of January 1, 2027, Ovintiv will be required to adopt ASU 2024-03 “Disaggregation of Income Statement Expenses” for annual disclosures with interim disclosures required beginning in the first quarter of 2028. The new standard requires that an entity disclose tabular information about certain expenses including, but not limited to, purchases of inventory, employee compensation, and depreciation, depletion, and amortization expense that are presented within expense line captions reported in the statement of earnings. A qualitative description of the remaining other amounts within those expense line captions will be required. The Company will also be required to determine and disclose its definition of selling expenses and the total amount of selling expenses. The amendments are to be applied prospectively, with the option for retrospective application, and are not expected to have a material impact on the Company’s Consolidated Financial Statements.
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As of January 1, 2028, Ovintiv will be required to adopt ASU 2026-02 “Environmental Credits and Environmental Obligations”. The guidance applies to entities with operations subject to environmental regulations and those that either internally generate or acquire environmental credits to achieve targets related to carbon footprint initiatives. Under the new standard, an entity will recognize and measure environmental credit assets based on their intended use and how the credits were obtained. Environmental credit obligations will be recognized and measured depending on whether an entity holds and expects to use compliance environmental credits to settle that obligation. Disclosures for environmental credits and obligations applies to annual reporting periods. The new standard will be applied retrospectively at the date of adoption through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption without recasting financial information before the period of adoption. Ovintiv is currently evaluating the impact of the new standard and does not expect the standard will have a material impact on the Company’s Consolidated Financial Statements.