Asset-as-a-service. Off balance sheet?

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Ulf01
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Joined: 04 May 2021, 08:30

Asset-as-a-service. Off balance sheet?

Post by Ulf01 »

As a financial service provider we have been asked by a client to make an asset (which is providing electric energy) available to them so it is off-balance sheet for the client.
What can be done? As far as I understand, with IFRS16 operating lease no solution anymore.
How about an asset-as-a-service solution (pay-per-use) where the client pays according to the energy used. Which criteria needed to be fulfilled so this can be off balance sheet?
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Marek Muc
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Re: Asset-as-a-service. Off balance sheet?

Post by Marek Muc »

what do you mean by 'an asset providing electric energy', what do they want to achieve?
Ulf01
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Re: Asset-as-a-service. Off balance sheet?

Post by Ulf01 »

In this case it is about large scale batteries but we also work on other projects which are about charging infrastructure for heavy duty electric mobility.
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Marek Muc
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Re: Asset-as-a-service. Off balance sheet?

Post by Marek Muc »

I see. Then your client needs a contract to purchase services (e.g. storing energy). How to do it? Go through the decision tree below and make sure that the contract does *not* satisfy the definition of a lease:

https://ifrscommunity.com/knowledge-bas ... g-a-lease/
Ulf01
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Re: Asset-as-a-service. Off balance sheet?

Post by Ulf01 »

Excellent - thank you!
JRSB
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Re: Asset-as-a-service. Off balance sheet?

Post by JRSB »

Sounds like an interesting scenario where your customer is interested in a solution based on the accounting first!
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