SBR MOCK TEST QUESTION edition sept 20/Dec20/Mar21/Jun21

Hi Stephen,
I hope you are keeping well, I have the belong question from mock test, and that unfortunately I do not have the answer. Could you help me on this?

Coate, a public limited company, is a producer of ecologically friendly electrical power (green electricity).
Main revenue comprises mainly the sale of electricity and green certificates. Coate obtains green certificates under a national government scheme. Green certificates represent the environmental value of green electricity. The national government requires suppliers who do not produce green electricity to purchase a certain number of green certificates. Suppliers who do not produce green electricity can buy green certificates either on the market on which they are traded or directly from a producer such a Coate. The national government wishes to give incentives to producers such as Coate by allowing them to gain extra income in this way.

Coate obtains the certificates from the national government on satisfactory completion of an audit by an independent organisation, which confirms the origin of production. Coate then receives a certain number of green certificates from the national government depending on the volume of green electricity generated. The green certificates are allocated to Coate on a quarterly basis by the national government and Coate can trade the green certificates.

Coate is uncertain as to the accounting treatment of the green certificates in its financial statements for the period ended 30 November 20×2 and how to treat the green certificates which were not sold at the end of the reporting period.

Accounting treatment:
Government incentives- buy the green certificates from government and resale them having extra income.

Green Certificates is traded as commodities, measure at FVTPL derecognizing when it is sale under IFRS 9 financial instrument.