The Central Power Purchasing Agency (CPPA-G) has requested an extension for exemption from IFRS-9 accounting standards, citing growing concerns over potential credit losses due to unpaid power sector receivables. This exemption, set to expire soon, is critical for the CPPA-G to avoid the financial hit that would arise from the inability to clear massive receivables in the power sector.
The agency is grappling with large-scale receivables owed by various distribution companies and government entities. The CPPA-G fears that implementing the IFRS-9 standards—aimed at providing for expected credit losses—would severely impact its financial position. In its petition, the agency emphasized the risk of default and the urgent need for the government to address the ongoing circular debt crisis that continues to plague the power sector. Without resolution, the CPPA-G argues that meeting financial stability requirements could become increasingly difficult.
The CPPA-G has urged the government to take immediate action to clear the outstanding dues and provide much-needed financial relief to prevent long-term credit loss and financial instability in the sector.
