International Financial Reporting Standard

Grant Thornton's comments to the IASB on Contracts for Renewable Electricity

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Grant Thornton has responded to IASB public consultation on the Exposure Draft - Contracts for Renewable Electricity proposing amendments to IFRS 7 and IFRS 9 by submitting its comments.
Contents

On 8 May 2024 the International Accounting Standards Board (IASB) published for public comment the Exposure Draft Contracts for Renewable Electricity (ED/2024/03) and Grant Thornton International Ltd. has submitted its comment letter.

The Exposure Draft proposes narrow-scope amendments to ensure that financial statements more faithfully reflect the effects that renewable electricity contracts have on a company. The proposal amend IFRS 9 'Financial Instruments' and IFRS 7 'Financial Instruments: Disclosures', addressing how companies should account for Contracts for Renewable Electricity.

Responses will be critical to ensuring that the Accounting Standards keep pace and provide investors with useful information on companies' transition to renewable electricity sources.

At Grant Thornton we welcome the IASB's efforts and objectives set out in this Exposure Draft, and we believe that the proposed amendments will address many stakeholder concerns. However we have also raised a number of points where we believe that the proposals could be changed to make them easier to understand and therefore enable more consistent application. The main points we have considered are:

  • the differences in scope for the two areas of the proposals (own-use contracts and hedge accounting challenges);
  • Details of the own use assessment;
  • Uncertainties relating to the application of hedge accounting to these contracts; and
  • New disclosure requirements for own use contracts.
Comment letter from Grant Thornton International Ltd.

Comment letter from Grant Thornton International Ltd.

Read here the letter sent by Grant Thornton to the IASB in response to its public consultation. If you wish to discuss any of the points, please contact us at post@ar.gt.com.
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