ASCG comment letter on the IASB ED/2024/3 Contracts for Renewable Electricity

On 9 August, the ASCG has submitted its comment letter on the ED/2024/3 Contracts for Renewable Electricity to the IASB.

Therein the Financial Reporting Technical Committee supports the IASB’s efforts to clarify and amend existing IFRS 9 / IFRS 7 requirements in the context of energy contracts with a renewable source. In particular, the ASCG supports the IASB’s approach for scoping and ring-fencing the proposed amendments.

However, we have identified some room for improvement as regards the wording, and we have reservations as regards some of the proposed characteristics or features. In particular, we

• generally agree with the proposed scope, but suggest further specific­ation or amended wording, mainly for the “pay as produced” characteristic in para. 6.10.1(b);
• are not convinced about the factors to be considered in applying the own-use exemption, in particular we have reservations against the “purchase” criterion in para. 6.10.3(b)(iii);
• have some reservations against the proposed disclosures;
• suggest 1 January 2026 as effective date.

In addition to our comments that directly relate to the ED, we stated that – although supporting the ED’s narrow approach – the ED excludes other contracts which have been (and still are) under discussion, e.g. oversized contracts. Therefore, we provided some additional comments on those contracts that are beyond the scope of this ED. Since a swift process for developing and finalising the proposed amendments is desired, we suggest that our additional findings be considered separately, i.e. for potential future deliberation.