LATEST UPDATE

IASB updates IFRS Accounting Standards for nature-dependent electricity contracts

The International Accounting Standards Board (IASB) has issued targeted amendments to help companies to better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements.

Nature-dependent electricity contracts help companies to secure their electricity supply from sources such as wind and solar power. The amount of electricity generated under these contracts may vary based on uncontrollable factors such as weather conditions. Current accounting requirements may not adequately capture how these contracts affect a company’s performance.

To allow companies to better reflect these contracts in the financial statements, the IASB has made targeted amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures.

IFRS Digital subscribers may access the amendment on: https://www.ifrs.org/premium/

Digital subscribers will also be able to download the document from the IFRS Accounting Standards Navigator (https://www.ifrs.org/issued-standards/list-of-standards/) and the Power Purchase Agreements project page (https://www.ifrs.org/projects/completed-projects/2024/power-purchase-agreements/). PDF copies will be available to order from the Web Shop (https://shop.ifrs.org/).