Regulatory updates

Regulatory updates

Updates from IASB

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Renewable electricity contracts provides entities with access to renewable electricity sources, irrespective of the entity’s needs at the time of production. The supply of such sources cannot be guaranteed and the entity is required to pay for the produced amount of electricity.

Such characteristics result in accounting challenges with respect to renewable electricity contracts.

Given the increasing global market for these contracts, IASB has proposed the following narrow scope amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures, which:

  • Address how the ‘own-use’ requirements would apply
  • Permit hedge accounting if these contracts are used as hedging instruments; and
  • Add disclosure requirements to enable investors to understand the effects of these contracts on a company’s financial performance and future cash flows.

The comment period ends on 7 August 2024.

To access the text of the exposure draft, pleaseclick here

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