16/01/2025 - EFRAG Endorsement Advice on Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7
EFRAG has completed its due process regarding Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 and has submitted its Endorsement Advice Letter to the European Commission.
On 18 December 2024, the IASB published Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7 ('the Amendments'), which were initially issued as an exposure draft (ED/2024/3) in May 2024.
The objective of the Amendments is to better reflect the effects of physical and virtual nature-dependent electricity contracts in the financial statements through narrow-scope amendments to the own-use assessment, hedge accounting and disclosure requirements.
The Amendments should be applied retrospectively for the own-use amendments and prospectively for the hedge accounting amendments for annual periods beginning on or after 1 January 2026, with earlier application permitted.
EFRAG has submitted its Endorsement Advice Letter relating to the Amendments for use in the European Union and European Economic Area. EFRAG assesses that the Amendments meet the technical endorsement criteria of the IAS Regulation and are conducive to the European public good. EFRAG therefore recommends their endorsement. EFRAG's recommendation can be found in a letter to the European Commission, along with its accompanying appendices.
EFRAG has updated the EFRAG Endorsement Status Report, which can also be downloaded under the menu 'Endorsement Status'.
