Given the criteria established in both cases, it would appear that many AAEs could be considered leases, particularly behind the facilities. But that is not necessarily the case. If, for example, a project owner has received relief that allows the owner free access to a project installed on the roof of a building [z.B a school (the client) ], does the school have access to the project? Or, if the developer retains all the credits and incentives of a project, does the Offtaker have all the economic benefits? And if the buyer can`t control the project`s exit or can`t change the system maintenance provider, do they have the right to manage the use of the project? These are difficult but important questions that need to be answered in order to clarify the client`s accounting of the agreement. On that date, the clean use exemption should be reviewed in accordance with IFRS 9. If the AAE service is physically billed and used for the customer`s business, it is an outstanding purchase agreement. In this case, this would not be recognized and would only be considered for possible dependent contracts, in accordance with IAS 37. However, if it is a derivative, the green electricity customer may, in certain circumstances, avoid reporting changes in fair value by profit or loss through the application of hedging accounting. Indeed, even in the case of non-physical billing of the electricity supplied, it may be possible to link an AEA as a price hedging transaction to the risk of a volatile electricity supply in the future. The energy market is facing new changes: producers and large consumers are currently preparing for financing for the first wind farms to expire at the end of 2020 and price controls to be completed.
However, since even without government assistance, producers need revenue security to make the necessary investments in wind farms, other mechanisms will be needed in the future to allow energy sources to bring wind to market. Power purchase contracts (AAEs) – long-term direct purchase contracts with large customers – are a possible solution. Such agreements are currently considerably popular, although there are legal and accounting challenges with regard to their design, including for green electricity customers. The nature of the AAE, its structure and pricing depend, among other things, on the objectives of the buyer, the specific market (and whether the market is regulated or unregulated) and the financial needs and objectives of the proponent/owner of the project. All the variables in these regulations raise a number of accounting issues that need to be addressed.