Exposure Draft on Contracts for Renewable Electricity (Proposed amendments to IFRS 9 and IFRS 7)

Indian Accounting Standards (Ind AS) are based on the IFRS Standards issued by the International Accounting Standards Board (IASB) of IFRS Foundation. The IASB, before issuing the new/amendments to IFRS Standards, issues consultative documents [such as Discussion Paper (DP), Exposure Draft (ED) etc.] seeking public comments from across the globe. The Accounting Standards Board (ASB) of ICAI with the aim to provide an opportunity to the various stakeholders in India to raise their concerns at the initial International Standard-setting stage itself, invites comments on the consultative documents issued by the IASB. It also helps the Indian stakeholders to be aware of the preparations required for implementation of Ind AS in line with adhering to global timelines. Recently, the IASB has issued the following Exposure Draft for public comments: 

  • Exposure Draft on Contracts for Renewable Electricity (Proposed amendments to IFRS 9 and IFRS 7)

The IASB proposes amendments to IFRS Accounting Standards for contracts to buy or sell renewable electricity that have specified characteristics. The IASB proposes to amend IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures, specifically:

  1. the own-use requirements—to include the factors an entity is required to consider when applying paragraph 2.4 of IFRS 9 to contracts to buy and take delivery of renewable electricity for which the source of production of the electricity is nature dependent and the purchaser is exposed to substantially all of the volume risk;
  2. the hedge accounting requirements—to permit an entity using a contract for renewable electricity with specified characteristics as a hedging instrument:
    • to designate a variable volume of forecast electricity transactions as the hedged item if specified criteria are met; and
    • to measure the hedged item using the same volume assumptions as those used for the hedging instrument; and
  3. the disclosure requirements—to add disclosure requirements to enable users of financial statements to understand the effects of contracts for renewable electricity with specified characteristics on an entity’s financial performance and on the amount, timing and uncertainty of the entity’s future cash flows.

The IASB is also proposing consequential amendments to IFRS 19, Subsidiaries without Public Accountability: Disclosures; to add similar disclosure requirements.

How to comment: 



Click on "Submit  a comment letter" below(Preferred mode) 



Comments can be sent to: commentsasb@icai.in  



Secretary, Accounting Standards Board,  

The Institute of Chartered Accountants of India,  

ICAI Bhawan, Post Box No. 7100,   

Indraprastha Marg, New Delhi 110 002  

Further clarifications on this Exposure Draft may be sought by e-mail to asb@icai.in.

Comment letter deadline

The Exposure Draft is open for comment until 8th July, 2024

Due process documents
Exposure Draft on Contracts for Renewable Electricity (Proposed amendments to IFRS 9 and IFRS 7)  [PDF]