AASB ED 330 Contracts for Renewable Electricity

Friday, May 24, 2024

ED 330 Contracts for Renewable Electricity proposes changes to the financial instrument accounting for renewable electricity contracts with specified characteristics.

Contracts for renewable electricity are often structured as power purchase agreements (PPAs), whether physical PPAs or virtual PPAs.

The proposals would amend AASB 9 Financial Instruments and AASB 7 Financial Instruments: Disclosures to:

• address how the ‘own-use’ requirements would apply;
• permit hedge accounting if these contracts are used as hedging instruments; and
• add disclosure requirements regarding the effects of these contracts on an entity’s financial performance and future cash flows.

The AASB’s proposed amendments are the same as those proposed by the IASB to IFRS Standards.

Please submit your comments to the AASB by 21 June 2024, via the AASB website or email to [email protected].