Surge in Renewable Energy Contracts Spurs Global Accounting Redo

The International Accounting Standards Board proposed changes Wednesday to how companies account for renewable energy contracts, which have surged in popularity globally in recent years.

The slate of proposals is designed to give investors more information about the financial impact of renewables contracts, which can pose accounting challenges. Companies use such contracts to secure access to renewable electricity sources, often over several years. The contracts can require companies to buy whatever energy is produced from sources such as wind or solar power, regardless of whether they use it, IASB said.

The board’s accounting proposals would let companies treat renewables contracts ...