AASB issues Tier 2 disclosure requirements for Nature-dependent Power Purchase Agreements

Tuesday, August 26, 2025

AASB 2025-3 amends AASB 1060 to add new disclosure requirements for Tier 2 entities that recognise nature-dependent electricity contracts meeting the ‘own-use’ criteria as procurement contracts.

AASB 2025-3 Amendments to Australian Accounting Standards – Contracts Referencing Nature-dependent Electricity: Tier 2 Disclosures is available on the AASB Pronouncements Web Portal.

For contracts referencing nature-dependent electricity that meet the ‘own-use’ criteria and are recognised as procurement contracts, Tier 2 entities are required to disclose:

• information about contractual features that expose the entity to variability in the underlying amount of electricity and the risk that the entity would be required to purchase electricity at a time when the entity cannot use the electricity;
• qualitative information about how the entity assesses whether a contract might become onerous; and
• qualitative information about the effects on the entity’s financial performance for the reporting period.

The Standard also provides Tier 2 entities with transitional relief regarding comparative information and the amounts of any adjustments to financial statement line items.

AASB 2025-3 applies to annual periods beginning on or after 1 January 2026. Earlier application is permitted.