Course 15 of 20 · Power Origination and PPA Desk Academy

PPA Accounting, Embedded Derivatives & Disclosure

Stage D, Financing, accounting and portfolio. Level 8 of 10.

Classifying a contract under own-use, lease, embedded-derivative and hedge accounting tests, and the reporting consequences of each outcome.

122 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 11, Course 12, Course 13

Enrol or enquire See the 122 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 122 chapters

Open any module for its full chapter list, in teaching order.

M0 What a Classification Decision Settles, and Who Settles It Ch 1-10
  1. The Question an Origination Desk Brings to the Accountant
  2. Four Tests, One Contract, and How They Interact
  3. Why Standards Are Named Here and Thresholds Never Quoted
  4. Two Reporting Frameworks Can Reach Two Answers
  5. Whose Accounts and Whose Judgement
  6. What Is Assumed from Settlement, Valuation and Flexibility
  7. Reported Volatility Is Not a Cash Loss
  8. The Vocabulary Classification Runs On
  9. Who Inside the Business Owns the Answer
  10. What This Material Hands On to Other Courses
M1 Is the Agreement a Derivative at All? Ch 11-21
  1. The Executory Contract a Desk Expects and the Instrument It May Get
  2. The Derivative Definition, Part One: Underlying and Notional
  3. The Derivative Definition, Part Two: Initial Investment and Settlement
  4. Net Settlement and Why a Difference Payment Weighs So Much
  5. A Virtual Agreement Read Against the Definition
  6. A Grid-Delivered Physical Agreement Read Against the Definition
  7. Unit of Account: One Agreement or Several
  8. Why Electricity Sits Awkwardly in Instrument Standards
  9. Readily Convertible to Cash as a Net Settlement Route
  10. When a Written Option Hides in the Volume Terms
  11. What the Derivative Question Does Not Decide
M2 The Own-Use and Normal Purchase Exceptions Ch 22-33
  1. The Exception That Keeps a Supply Agreement Out of Scope
  2. IFRS 9 Own Use as the Standard Frames It
  3. Normal Purchases and Normal Sales Under ASC 815
  4. What Counts as the Entity's Own Requirement
  5. Pay-as-Produced Output Against Anticipated Consumption
  6. A Practice of Net Settlement Can Remove the Exception
  7. Selling Surplus Output and the Taint It May Create
  8. The Fair Value Election for an Eligible Own-Use Contract
  9. Nature-Dependent Electricity and the Amendments Addressing It
  10. Where Two Frameworks Land Differently on One Sleeved Deal
  11. A Third Framework in the Room
  12. Documenting the Exception on the Day of Signature
M3 Does the Agreement Convey a Leased Asset? Ch 34-44
  1. Why an Electricity Offtake Can Become a Lease
  2. IFRS 16 and ASC 842: The Identification Question
  3. An Identified Asset or Merely a Quantity of Electricity
  4. Substantially All of the Economic Benefits
  5. Who Directs How and for What Purpose the Plant Runs
  6. The Legacy of IFRIC 4 and Why Older Memos Read Oddly
  7. An On-Site Agreement Behind the Buyer's Meter
  8. Lease and Non-Lease Components in One Document
  9. Payments That Vary With Output
  10. The Generator Sitting as Lessor
  11. What a Lease Conclusion Does to the Buyer's Gearing
M4 Embedded Features and What Separates Ch 45-55
  1. A Host Contract With Something Else Inside It
  2. Characterising the Host Before Testing the Feature
  3. Closely Related, and Why Power Price Terms Usually Are
  4. Inflation Indexation Inside a Long-Dated Strike
  5. A Strike Denominated in Another Currency
  6. Indexation to a Commodity the Agreement Never Delivers
  7. Caps, Floors and Collars Read as Embedded Features
  8. Volume Flexibility and the Option It Embeds
  9. Termination and Change in Law Clauses as Features
  10. Separating the Feature and What Then Appears
  11. Fair Valuing the Whole Hybrid Instead
M5 Measuring What Classification Produced Ch 56-66
  1. Fair Value for an Agreement With No Market Price
  2. IFRS 13 and ASC 820: The Measurement Objective
  3. The Input Hierarchy and Why Long Tenors Sit Low In It
  4. Extending a Curve Past Its Liquid Horizon
  5. Day One: A Gain the Accounts May Not Recognise
  6. Counterparty Credit Inside the Measurement
  7. Discounting a Payment Stream Fifteen Years Out
  8. Shape, Basis and Volume Compressed Into One Figure
  9. Independent Verification for an Agreement That Trades Nowhere
  10. Where the Movement Lands: Profit or Loss, or Reserves
  11. A Measurement Is Not a Price Opinion
M6 Hedge Accounting for a Power Purchase Agreement Ch 67-78
  1. The Mismatch a Corporate Offtaker Reports
  2. A Regime That Must Be Earned and Maintained
  3. Designating the Agreement as the Hedging Instrument
  4. The Buyer's Hedged Item: Forecast Electricity Purchases
  5. The Generator's Hedged Item Is the Opposite
  6. Weather-Driven Volume Against a Forecast Load
  7. Economic Relationship and the Forward-Looking Assessment
  8. Where a Renewable Relationship Leaks
  9. The Hedge Ratio and Rebalancing It
  10. The Cash Flow Hedge Reserve and When It Unwinds
  11. Discontinuation and What Remains in Reserve
  12. Documentation on the Day of Designation
M7 Revenue, Provisions and the Generator's Accounts Ch 79-88
  1. When the Agreement Is Revenue Rather Than an Instrument
  2. Promises Inside an Electricity Sale
  3. Variable Consideration When Price Follows an Index
  4. Availability Payments Alongside the Energy Price
  5. Deemed Generation Receipts in the Seller's Accounts
  6. The Onerous Contract Question
  7. When an Offtake Triggers Impairment of the Plant
  8. Amendment, Novation and Reassessment
  9. Does Anybody Recognise Inventory?
  10. Gross or Net in the Income Statement
M8 Disclosure and the File Behind It Ch 89-100
  1. The Note a Reader Actually Needs
  2. IFRS 7 and the Instrument Disclosures
  3. The Hierarchy Disclosure and Its Burden
  4. Disclosing the Judgement, Not Only the Outcome
  5. What the Hedge Accounting Disclosures Reveal
  6. The Nature-Dependent Electricity Disclosures
  7. What Is Not Disclosed Here: The Attribute Claim
  8. The Classification Memo as a Deliverable
  9. The Evidence an Auditor Will Request
  10. When the Auditor Reaches a Different Conclusion
  11. Comparatives, Transition and an Amended Standard
  12. Keeping the Position Alive as Standards Move
M9 Where the Reported Answer Changes the Deal Ch 101-111
  1. Reading a Term Sheet for Its Reporting Consequences
  2. The Clause That Prices Well and Classifies Badly
  3. Choosing a Settlement Route With the Accounts in View
  4. Should Accounting Drive Structure? The Argument and Its Assumptions
  5. Explaining a Fair Value Swing to a Board
  6. What Treasury and Covenant Reporting Need to Know
  7. The Approval Paper a Procurement Committee Reads
  8. One Agreement, Two Sets of Accounts, Two Answers
  9. Can the Cost of a Treatment Be Priced?
  10. When a Treatment Changes Mid-Term
  11. Portfolio Effects Named and Deferred
M10 A Worked Classification, End to End Ch 112-122
  1. A Worked Case, Part One: The Facts and the Unit of Account
  2. A Worked Case, Part Two: Definition and Own Use
  3. A Worked Case, Part Three: Measurement and the Reported Result
  4. A Worked Case, Part Four: Designation and the Reserve
  5. A Second Worked Case: An On-Site Arrangement Reaching a Lease
  6. A Third Worked Case: An Inflation-Indexed Physical Deal
  7. The Register of Judgements an Agreement Carries
  8. The Checks That Catch a Wrong Treatment Early
  9. What This Classification Work Cannot Do
  10. What the Method Deliberately Flattens
  11. Handing Each Remaining Thread to Its Owner

The brochure gives each of these 122 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 15 of twenty

It stands alone, and it is also the entry point to the Power Origination and PPA Desk Academy pathway.

Enrol or enquire See the whole pathway