Reference no: EM132910349

Question - Green energy plc has built solar panel farm with the purpose of testing the efficiency of its prototype solar panel. Green energy has applied to the regulators for approval for production of its new prototype but has only received permission to test the prototype solar panel. The solar panel farm development will enable Green energy to test the reliability of the new solar panels, which should assist in developing more efficient and cost-effective offshore oil rigs (instead of producing electricity with diesel engines). As yet, however, there has not been any commercial production of the prototype solar panels as there is still some doubt about over the panels' durability in extreme weather conditions. The renewable energy generated during the testing phase of the solar panels is sold to the national regulator of electricity. There is a sufficient resource to complete the solar panels project, but the energy income has not been included in management's resource planning.

REQUIRED - Explaining the accounting treatment by reference to IFRS Standards. Client also asks if the treatment for This case would be different under US GAAP.