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

+1 604 449 2439

[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
Deliberating feedback

The AcSB submitted its response letter to the IASB in August 2024

The IASB is currently deliberating comments on its Exposure Draft
Final pronouncement

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.