Accounting for long-term Power Purchase Agreements (PPAs)

Who are the intended participants?

• Employees from the electricity sales, business strategy, and risk management departments of companies producing or distributing electricity (from traditional and renewable resources)
• Accountants and reporting and controlling staff of electricity producers/distributors
• Companies that purchase or are considering purchasing electricity through a PPA or VPPA – employees of accounting, reporting, purchasing or planning departments.

Programme

• PPAs and their role in optimising the electricity purchase or sale strategy
• Use of PPAs in meeting ESG objectives
• Accounting implications of PPAs, differences between PPAs and VPPAs
• Application of the own-use exemption for agreements with physical settlement
• Addition of IFRS standards for PPAs on renewable resources
• Conditions for the application of hedge accounting for PPAs/VPPAs
• Example (summary) of a possible application of hedge accounting for PPAs/VPPAs

Benefits

After completion of the course, you will:

• Understand the contribution of PPAs to securing the volume and price of electricity purchased (or sold) and the impact on meeting ESG criteria
• Find out what the accounting implications of PPAs/VPPAs are for different alternatives depending on the type and content of the agreement, the way companies do business and manage risks
• Know of the risks associated with entering into an agreement that may represent a burden in terms of reported accounting results and associated implications (tax, covenant compliance, etc.)