IFRS for Electric Utility Companies (2 days)

Introduction

This two-day course examines in detail international accounting issues and their effect on electric utility companies. Our specialist instructors discuss the critical issues that go beyond mere number-crunching, and explain in clear and simple terms how electric utility companies can conduct and shape their accounting and reporting practices in accordance with international best practices.

Unlike US GAAP and other national GAAP, IFRS currently provides little guidance specific to the electric utility industry’s unique business circumstances. Therefore much judgment is required in applying IFRS concepts to areas such as energy contracts, transportation, generation, transmission, distribution, risk management and derivatives.

This course contrasts the IFRS approach with US / Canadian GAAP, where some significant differences exist, and identifies those areas where accounting policy choices are critical for companies adopting IFRS for the first time.

This valuable program answers questions such as:

• What adjustments could be necessary for electric utility companies facing adoption of IFRS?
• How are rules on composite asset accounting and retirement obligations applied?
• What choices are available in accounting for energy generation, transmission and distribution?
• When must an entity other than a subsidiary be consolidated into a parent entity's financial statements?
• How should accounting policies be established when specific guidance does not exist?
• When are energy contracts accounted for as derivatives?
• How often is impairment testing required?
• What are major IFRS vs. US / Canadian GAAP differences affecting the electric utility sector?
• How are first-time adopters of IFRS subject to rate regulation affected by IFRS 14 Regulatory Deferral Accounts?

Learning Objectives

• Make the adjustments necessary for electric utility companies to adopt IFRS
• Utilize rules on composite asset accounting and retirement obligations
• Understand the choices in accounting for energy generation, transmission and distribution
• Learn how to establish revenue recognition policies
• Comply with the requirements for consolidation of an entity in the parent’s consolidated financial statements
• Establish accounting policies where specific guidance does not exist
• Determine when energy contracts are accounted for as derivatives
• Comprehend the advantages and disadvantages of utilizing hedge accounting, and assess the impact upon the financial statements
• Identify indications of impairment and perform impairment tests
• Understand those major IFRS vs. US / Canadian GAAP differences affecting the electric utility sector

Who Should Attend

• CFO’s new to the electric utilities industry
• CFO’s of electric utility companies in the process of adopting IFRS
• Financial and management accountants in the electric utilities industry
• Internal and external auditors of electric utility companies reporting under IFRS
• Financial analysts seeking to improve their understanding of the accounting by electric utility companies

Topics

• Impact of first-time adoption of IFRS
• Recently Issued Standards, Interpretations and their impact on electric utility companies, including IFRS 14 Regulatory Deferral Accounts and IFRS 15 Revenue from Contracts with Customers
• Forthcoming and proposed IFRS changes that will affect electric utility companies
• Production sharing arrangements vs. concession rents
• Property, plant and equipment
• Borrowing costs
• Intangible assets
• Provisions, contingent liabilities and contingent assets
• Impairment of assets
• Asset retirement obligations
• Transportation agreements
• Customer acquisition costs
• Long-term fuel purchase and sale contracts
• Derivative treatment for energy contracts, including 'own use' exemption
• Tolling contracts
• Emission rights trading
• Service concession arrangements, right of use, and lease accounting
• Revenue recognition issues
• Business combinations and consolidations
• Risk management: trading and hedge accounting
• “Stand alone” and “embedded” derivatives
• IFRS vs. US / Canadian GAAP

Teaching Method

• Group live instruction with interactive participation encouraged
• Identification of critical issues in accounting for electric utility companies
• Succinct examples and cases that illustrate classification and accounting for energy-related transactions
• Presentation and discussion of model financial statement disclosures
• Exercises to illustrate the accounting for risk management transactions (e.g. hedging)
• Brief comparisons of IFRS and Canadian/US GAAP
• All participants receive a comprehensive binder containing copies of the presentation slides, handouts and other course materials

Instructors

Venue

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

 

Field of study: Accounting

Prerequisites

Intermediate understanding of accounting principles based on any national standards. No advance preparation is required for this course.