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IFRS® Accounting Standards

Power Purchase Agreements

Summary

Canadian entities are increasingly entering into long-term power purchase agreements (PPAs) for the procurement of renewable energy. PPAs are part of entities’ commitment to mitigate the effects of climate change and to decarbonise their production processes and products. PPAs are affected by the structure of energy markets in the jurisdictions entities operate within. Changing market conditions give rise to application challenges and questions when applying the requirements in IFRS 9 Financial Instruments. These challenges can result in accounting outcomes that do not faithfully represent the economic substance of such contracts.

Staff Contact(s)

Alex Levine, CPA, CA Principal, Accounting Standards Board and Sustainability Reporting

Phone number  +1 604 449 2439
Email address  [email protected]

Project Status

  • Information gathering

    The IASB added the Power Purchase Agreements project to its work plan in July 2023

  • Approving project

    After research and outreach, the IASB moved the project into standard-setting

    Balloting for proposed amendments was completed in March 2024

  • Engaging Communities

    The IASB issued its Exposure Draft, Proposed Amendments to IFRS 9 and 7, in May 2024

    Exposure Draft
  • Deliberating feedback
  • Final pronouncement

News

June 4, 2024

International Activity, Document for Comment, News

IASB Exposure Draft – Contracts for Renewable Electricity

The IASB has published its Exposure Draft, “Contracts for Renewable Electricity,” which proposes amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. Respond directly to the IASB with your feedback by August 7, 2024. Also, stay tuned for the AcSB's wraparound exposure draft. If you want the AcSB to consider your feedback before finalizing our comment letter, please respond by July 31, 2024.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal voting process.