Derivative Instruments & Hedge Accounting for Energy Transactions

Derivative Instruments & Hedge Accounting for Energy Transactions

Properly Documenting & Reporting Commodities, PPAs, Leases and Fair Value Transactions in Accounting Statements & Disclosures

September 15-16, 2021 | Online :: Central Time

Overview

“I’m new to this industry, and the course was an excellent opportunity to accelerate my transition.” Accounting Manager, Liberty Power

“This course is a must-have for all areas of derivative accounting and risk.” Senior Accountant, First Choice Power

“The course exceeded my initial expectations.” Energy Commodity Risk Administrator, Tri-State G&T

This one-and-a-half-day seminar addressing derivative, fair value and hedge accounting issues is tailored to staff in the energy and power industries. It provides attendees with an opportunity to delve into the nuanced application of FASB Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging (formerly FAS 133), and related amendments and disclosures.  This course will also cover ASC Topic 820, Fair Value Measurements and Disclosures (formerly FAS 157), including a discussion of strategies for determining fair values for hard-to-value energy and power contracts. Finally, the course will include specific considerations around applying these concepts to power markets and energy trading activities. 

An overview will include a summary of the standard itself, changes from existing accounting practices and a discussion of how these standards are expected to impact energy companies. There will be an optional workshop that focuses specifically on renewable energy products and the associated accounting considerations.

Learning Outcomes

Attendees will receive instruction and cover materials that will allow them to:

  • Apply the understanding of ASC 815 (FAS 133) and 820 (FAS 157) requirements and its application to the energy industry
  • Demonstrate key accounting concepts and the related key controls and processes for application to derivative and hedging activities in operations
  • Explain and apply the latest disclosure requirements for derivatives and hedging activities
  • Evaluate and address the current developments in the power and energy trading markets
  • Discuss the new accounting developments related to hedge accounting (ASU 2017-12)

Agenda

Wednesday, September 15, 2021 : Central Time

8:45 – 9:00 a.m.
Log In and Welcome

12:15 – 1:00 p.m.
Lunch Break

9:00 a.m. – 5:00 p.m.
Course Timing

 

9:00 – 9:20 a.m. :: Overview and Introductions

9:20 – 10:30 a.m. :: Overview of ASC 815 Requirements for Energy and Power Companies

  • Definition of a derivative
  • Embedded derivatives
  • Application of scope exceptions available to energy contracts (normal purchase, normal sale)

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:15 p.m. :: Overview of ASC 815 Requirements for Energy and Power Companies (cont’d)

  • Notional evaluation – Full Requirements contracts
  • Examples & case studies
  • Disclosure examples
  • Public vs. Private application

12:15 – 1:00 p.m. :: Lunch Break

1:00 – 2:30 p.m. :: Overview of ASC 820 Fair Value

  • Fundamentals of ASC 820 as it relates to energy transacting and application
  • Illustrative examples of hierarchy levels (1, 2, 3)
  • Commodity pricing and forecasting models for level 2 or 3
  • Disclosure examples
  • Public vs. Private application

2:30 – 2:45 p.m. :: Afternoon Break

2:45 – 4:30 p.m. :: Power and Energy Accounting Issues

  • Financial transmission & congestion revenue rights (FTR’s and CRR’s)
  • Day one gains
  • Consideration of counterparty risk in valuation
  • Capacity Contract NPNS exceptions
  • Financial & physical settlements
  • Internal Controls
  • US GAAP vs IFRS Considerations
  • Q&A

4:30 p.m. :: Course Adjourns for Day

 

Thursday, September 16, 2021 : Central Time

8:45 – 9:00 a.m.
Log In

9:00 a.m. – 12:00 p.m.
Course Timing

 

9:00 – 10:30 a.m. :: Cash Flow & Fair Value Hedge Designation Overview

  • Types of hedges and hedge criteria
  • Requirements and accounting updates
  • Documentation requirements and timeline
  • Effectiveness testing requirements

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:00 p.m. :: Cash Flow & Fair Value Hedge Designation Overview (cont’d)

  • ASU 2017-12 application
  • Disclosure examples
  • Public vs. Private application
  • Case study

12:00 p.m. :: Course Adjournment

Workshop

Renewable Energy Instruments and Their Associated Accounting Considerations

Thursday, September 16, 2021 : Central Time

Transactions involving the generation, trading and consumption of renewable energy – as well as the buying and selling of environmental credits and carbon offsets including renewable energy credits (RECs) – are now commonplace in the power industry as more business organizations and governments embark on the road to net zero carbon emissions and transition to clean energy.  Such transactions are often complex in structure and require special accounting treatment, which often depend on the entity’s role(s) in the transaction. 

 

This workshop will provide an overview of accounting considerations around these renewable energy instruments, including a deep dive into contract assessments for renewable energy PPAs – both physical and virtual.

 

Learning Outcomes

Attendees will receive instruction and cover materials that will allow them to:

  • Examine emerging types of renewable energy products in the marketplace
  • Evaluate the accounting considerations related to different renewable energy products
  • Assess renewable energy contracts under the appropriate accounting framework
  • Apply best practices for environmental, social and corporate governance (ESG) disclosures related to the energy industry

 

Program Agenda

12:45 – 1:00 p.m.
Log In

1:00 – 5:00 p.m.
Workshop Timing

 

1:00 – 1:20 p.m. :: Introduction and Overview

1:20 – 2:45 p.m. :: Overview of Applicable Renewable Energy Accounting Consideration

  • Derivative accounting considerations (ASC 815)
  • Lease accounting considerations (ASC 842)

Renewable Energy Instruments and Contracts

  • Renewable energy credits (RECs)
  • Emerging instruments (carbon offsets, biofuels, etc.)
  • Types of contracts

2:45 – 3:00 p.m. :: Afternoon Break

3:00 – 4:45 p.m. :: Contract Assessment

  • Physical PPA
  • Virtual PPA

4:45 – 5:00 p.m. :: ESG Disclosure Overview

5:00 p.m. :: Workshop Adjournment

Instructors

Tawanda Chadenga, Partner – Energy Trading & Marketing Group, Deloitte

Tawanda Chadenga is a Houston-based partner with more than 22 years of experience serving a variety of large, complex public and private companies in the energy industry, primarily power and utilities (conventional and renewable) and oil & gas, energy trading and marketing companies. He leads the firm’s energy trading and marketing audit and accounting advisory practice, which provides specialized audit and accounting advisory services to companies with energy trading, marketing, or hedging activities.


Andres Sanchez, Senior Manager – Energy Trading & Marketing Group, Deloitte

Andres Sanchez is a Senior Manager, with more than 13 years of experience in audit and advisory working with a wide range of multinational corporations with energy and commodities trading in the US.  He is a member of the Deloitte US Energy Trading & Markets group specializing in technical accounting (US GAAP and IFRS) and auditing matters, risk assessment, and internal controls in the energy marketing and trading industry. Hiss experience also includes the valuation and accounting assessment of complex energy contracts in both the conventional and the renewables power and utilities industry.


Adam Weingarten, Senior Manager – Energy Trading & Marketing Group, Deloitte

Adam Weingarten is a Senior Manager, who has served Deloitte’s energy clients for more than a decade. He is a member of Deloitte’s energy trading and marketing audit and accounting advisory practice, which primarily focuses on auditing energy trading companies and providing related accounting advisory services, including cash flow and fair value hedge accounting, valuation, and disclosure requirements.


Michael Gorter, Senior Manager – Energy Trading & Marketing Group, Deloitte

Michael Gorter is an Audit & Assurance Senior Manager, with nearly ten years’ experience  in audit services, with previous audit roles at Deloitte including as MDP Manager in the National Office Accounting Services division.  His prior work experience includes serving as a tax intern at Reichert Tax & Bookkeeping as well as student Assistant Examiner at the FDIC.


David Sackllah, Manager – Energy Trading & Marketing Group, Deloitte

David Sackllah is an Accounting & Reporting Advisory Manager, who has served Deloitte’s energy clients for more than six years.  He is a member of Deloitte’s energy trading and marketing audit and accounting advisory practice. He has extensive experience auditing both energy trading companies and regulated power and utilities companies, related to commodity transactions (including natural gas and power trading) valuation, and disclosure requirements.  Mr. Sackllah also has considerable experience auditing internal controls over financial reporting for SEC filers, commodity valuations, regulatory accounting, and accounting assessment of structured contracts. He has provided various accounting advisory services, ranging from contract accounting assessments, internal control assessments and recommendations, valuation methodology implementation, and financial reporting.

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Register

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

Event Standard RateAttendees
Single Connection - Derivative Instruments & Hedge Accounting for Energy TransactionsUS $ 1295.00
Pack of 5 connectionsUS $ 5,180.00
Pack of 10 ConnectionsUS $ 9,065.00
Pack of 20 ConnectionsUS $ 15,540.00
Call us at 303.770.8800 if you have any specific questions on the volume discounts
* all other discounts do not apply to license packs

This event has the following workshops:

Renewable Energy Instruments and Their Associated Accounting ConsiderationsUS $ 495.00

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Take advantage of these discounts!

  • Attend the Course and workshop and pay US $ 1,695.00 per attendee (save US $ 95.00 each)

Cancellation Policy

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before August 13, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

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CEUs

Credits

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EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 0.9 CEUs for this course and 0.4 CEUs for the workshop.

 

Who Should Attend

Operating Functions

  • Accountants
  • Auditors
  • Controllers
  • Treasurers
  • Financial analysts
  • Structured credit
  • Credit risk analysts
  • Portfolio managers
  • Front office / Traders
  • Middle office / Risk
  • Back office

Representative Industries

  • Integrated electric utilities
  • Market operators and transmission companies
  • Public power
  • Generation companies
  • Retail power marketers
  • Wholesale power trading and marketing companies
  • Gas utilities and distribution companies
  • Retail gas marketers
  • Wholesale gas trading and marketing companies

This course is open to utilities, power and energy industry operating companies (see above), software vendors, consumer groups, and regulators only.  Registrations received from other tax, accounting and consulting practitioners will be evaluated on a case-by-case basis and may not qualify for attendance.  Questions re: the application of this restriction can be addressed to [email protected].  Any determination as to the fulfillment of a registration to attend this program shall reside solely with EUCI.

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