IASB finalise amendments to IFRS 9 / IFRS 7

Today, the IASB published amendments to IFRS 9 and IFRS 7. These amendments and clarifications relate to the accounting for power purchase agreements. The amendments and clarifications affect

• applying the own use exemption in IFRS 9.2.4 – this also applies to contracts to buy nature-dependent electricity, under which the volume of electricity is nature-dependent and cannot controlled, and therefore partial sales are unavoidable as a consequence from that nature-dependance and depending on the market’s design and operation;
• applying hedge accounting on such contracts as hedging instruments – cashflow hedge accounting also applies when cashflows vary due to variations in the volume (not only in the price) and when the designated variable amount is linked to the hedging instrument;
• additional disclosures under IFRS 7 and IFRS 19, which aim at making transparent the contracts’ terms as well as its effects on an entity’s performance and cashflows.

These amendments shall be applied for annual periods beginning on or after 1 January 2026, earlier application is permitted.

The amendments are available from the IASB and subject to a charge.