Contracts referencing nature-dependent electricity

IFRS 9 - fair value accounting - exemptions - own use.

For the purposes of IFRS 9, a contract referencing nature-dependent electricity means a contract that exposes an entity to variability in an underlying amount of electricity - referenced in the contract - because the source of its generation depends on uncontrollable natural conditions (such as the weather).

Examples include solar and wind-power electricity generation.

See also

• Contract
• Derivative
• Fair Value Adjustment
• Financial instrument
• FVTPL
• Hedge accounting
• IAS 32
• IAS 39
• IFRS 9
• IFRS 15
• International Accounting Standards Board (IASB)
• Net settlement
• Own use
• Power purchase agreement (PPA)
• Reporting entity
• Swap
• Underlying
• Virtual power purchase agreement (VPPA)

Other resource

• Own use exemption under IFRS Accounting Standards - Objective, scope, and practical implications for power purchase agreements (PPAs) - KPMG - March 2024