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Energy Transition: lease considerations for Power Purchase Agreements
This publication is part of a series that seeks to explore the accounting implications of emerging business models and arrangements related to Energy Transition.
The use of Power Purchase Agreements (PPA) in the supply of renewable energy is on the rise. This publication focuses solely on the assessment of whether solar and wind energy PPAs contain a lease in accordance with IFRS 16 Leases. In most cases, other accounting standards, including IFRS 9 Financial Instruments and IAS 38 Intangible Assets, also require consideration when accounting for PPAs.