The energy market is facing a new change: producers and large consumers are currently preparing for EEG aid for the first wind farms to expire at the end of 2020 and price controls to expire. However, since producers need income security to make the necessary investments in wind farms, other mechanisms will be needed in the future to allow energy sources to commercialize wind. Power purchase agreements (AAA) – long-term direct selling contracts with large customers – are one possible solution. Such agreements are currently becoming increasingly popular, although there are legal and accounting challenges as they are designed, including for green electricity customers. First, the ECA must be evaluated to determine whether or not it meets all the characteristics of a (incorporated) derivative. In this context, a controversial point could be the criterion of performance of the contract on the basis of an „underlying“ value, given that the final volume of the purchase is often measured only after the actual generation. It is obvious that it is not possible to accurately predict this volume for a wind farm and, therefore, a sufficient determination of the contract volume has generally not been considered to have been fulfilled in the past. However, IFRS 9 contains transposition directives (IFRS 9.IG. B.8) which now contain an example in which the quantity of a derivative is also not determined in advance. In the case of a ECA, the generally available waiting values for wind performance can therefore be used.

In the absence of substantial acquisition payments, an ECA should be able to meet all the criteria of a derivative in accordance with IFRS 9. A study published in September by KPMG outlined the basics of ASPs, the opportunities they offer and the impact on accounts. In the field of international accounting, these implications range from the eventual consolidation of a project company to processing as an upcoming purchase transaction. Possible intermediate steps are ifrs 16 leasing or the ifrs 9 financial instrument approach. Companies must assess whether an enterprise ECA is within the scope of derivative accounts under US GAAP, IFRS or both. Us-GAAP defines a derivative contract as a financial instrument or other contract with all of the following characteristics: Corporate PMs typically contain three of the four aforementioned characteristics, so the balance sheet depends on the contract`s ability to include a nominal amount. Often, these contracts can be structured in such a way that there is no reliably identifiable nominal amount. As a result, corporate PMs often escape derivative accounts under U.S. GAAP, unless there are contractual or minimum volumes defined in the contract.

In this respect, the accounting for 2As is not an option, but a consequence of the specific contractual provisions. EpAs therefore offer industrial companies a good way to obtain long-term and reliable supplies of much-needed green electricity. However, the impact on the accounts and, indirectly, on risk reporting should be fully reviewed in a timely manner. Derivative accounting requires that the contract be recognised in the balance sheet on a fair value basis. . . .

Categories: Allgemein