For solar and other renewable energy businesses, investment in fixed assets accounts for a significant part of the expenditure, for example, solar panels in the case of solar energy.
Power generating equipment is a fixed asset and is principally valued at cost. However, impairment accounting is required in certain cases.
Read on for brief coverage of five critical issues in the accounting for solar power plants. 1. Depreciation of Power Generating Equipment Investment in a solar power plant is in most cases characterized by fixed assets that carry most of the cost.
Investment in a solar power plant is in most cases characterized by fixed assets that carry most of the cost. The most notable pieces of equipment, in this instance, include solar PV modules, batteries, meters, and energy storage systems (ESS). But also remember to consider the not-so-obvious power generating equipment.
Care should be taken when accounting for these assets because while they are in the infrastructure segment, they present a unique risk-return profile. Read on for brief coverage of five critical issues in the accounting for solar power plants.
The IRENA’s report for the year showed that solar and wind were again at the helm of new renewable capacity. Even as the sector celebrates its growth, the right accounting approach is imperative for solar power plants. Proprietors and operators of solar power plants should consider several in the accounting of their facilities.