EFRAG has published its Draft Endorsement Advice (DEA) on Contracts Referencing Nature-dependent Electricity, which includes proposed amendments to IFRS 9 and IFRS 7. Stakeholders are invited to submit their comments by 13 January 2025.
Objective of the Amendments
The objective of the Amendments is to better reflect the impact of physical and virtual nature-dependent electricity contracts in the financial statements. This will be achieved through narrow-scope amendments to:
- Own-use assessment
- Hedge accounting
- Disclosure requirements
The Amendments should be applied:
- Retrospectively for the own-use amendments
- Prospectively for the hedge accounting amendments
These changes will apply for annual periods beginning on or after 1 January 2026, with earlier application allowed.
EFRAG’s Preliminary Assessment
EFRAG’s overall preliminary assessment is that the Amendments meet the criteria for endorsement for use in the EU. As a result, EFRAG recommends their endorsement. The consultation seeks stakeholder feedback on all aspects of its analysis, which supports this preliminary conclusion.
For more information [here]
To submit your comment letter [here]