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With Singapore’s push to achieve net-zero emissions by 2050, entities are encouraged to adopt sustainable practices such as the use of electricity from renewable sources. In doing so, more and more entities are entering into renewable power purchase agreements (PPAs) or purchasing renewable energy certificates (RECs). Questions have arisen about what PPAs and RECs are and the appropriate accounting treatment of PPAs and RECs.
ISCA, through its Financial Reporting Committee (FRC), has issued FRB 13 to aid the buyers in PPAs and RECs in selecting the most appropriate accounting standard to apply, this FRB sets out the key considerations for the buyers. This FRB does not address the accounting for the suppliers in PPAs and RECs.
FRB 13 can be found here.