BDO submits comment letter to the IASB on Exposure Draft 2024/3 Contracts for Renewable Electricity

While BDO supports the objective of the IASB to clarify how the own use requirements are applied to novel types of contracts, as well as the expansion of the hedge accounting requirements in IFRS 9 Financial Instruments, BDO believes the proposals should be clarified in a number of areas, which include:

IFRS 9.6.10.3(b)(iii): clarification of the basis under which an entity should assess whether the ‘reasonable time’ criterion is met.
IFRS 9.6.10.3(b)(iii): clarification of how the ‘equivalent volume of electricity’ criterion and how the ‘net-purchaser’ concept noted in BC20(c) is assessed.
Certain clarifications related to proposed hedge accounting requirements.
IFRS 9.7.2.52: clarification of how the change in the designation of a hedge accounting relationship is accounted for.

BDO has expressed concerns about the volume of additional disclosure requirements proposed in IFRS 7 Financial Instruments: Disclosures. BDO has also suggested that the effective date of the amendments be for annual reporting periods beginning on or after 1 January 2026 with earlier adoption being permitted.
The comment letter may be accessed here.