ACORE Comments to FASB Regarding Accounting for Investments in Tax Credit Structures Using Proportional Amortization Method

ACORE supports the FASB’s decision to add EITF Issue 21-A, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method to the EITF’s agenda. In certain situations, the application of current accounting methods result in financial reporting that inaccurately reflects the appearance of a non-economic equity investment in renewable energy projects, limiting sector investors to far below the number of its potential participants. Therefore, we support expanding the proportional amortization method of accounting to renewable energy tax credit structures. In the sections below, we provide background on tax equity structures in the renewable energy sector, the obstacles presented by current accounting rules, and considerations for expanding the proportional amortization method to renewable energy investments.