Battery offtake arrangement on electricity market: is it a lease?

“Inside every battery is a piece of a storm when you think about it.”

Lease accounting tend to polarise and my today's example is no exception.

One of the topics on the IFRIC's September'25 Agenda was the question of "economic benefits/ primary output" in a battery offtake agreement.

While "right to control the use" was pretty straightforward, an interesting argumentation evolved about the issue of economic benefits/ outputs of asset.

Similar questions come up in practice a lot. Meanwhile, I strongly believe there is more than one way to answer them.

Contradictory expectations & goals, time aspects (i.e. point in time of the decision making and time frame of a contract) and parties involved are some examples of how judgemental the question of "benefits" can be.

Find an easy-to-read overview of the topic + my tips in the carousel.

In the context of the question to IFRS a similar topic has been mentioned and compared by the submitters: "Economic Benefits from Use of a Windfarm" December 2021.

https://lnkd.in/ehS85-Gr

Full Agenda Decision from September 26th can be found here:

https://lnkd.in/euhJxNDv

Opening quote by Nick Fuller Googins, The Great Transition via Goodreads.