SecProbe.io

November 19, 2024
Belinda Nucifora
Chief Financial Officer
Iris Energy Limited
Level 12; 44 Market Street
Sydney, NSW 2000 Australia
Re:Iris Energy Limited
Form 20-F for Fiscal Year Ended June 30, 2024
File No. 001-41072
Dear Belinda Nucifora:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 20-F for Fiscal Year Ended June 30, 2024
Item 5. Operating and Financial Review and Prospects
Key Indicators of Performance and Financial Condition
Net electricity costs, page 92
1.You disclose that net electricity costs exclude the cost of REC purchases. We also
note your disclosure that if your existing REC brokers were to stop selling RECs to
you or otherwise limit the sale thereof, you would incur additional expense and
resources to obtain sufficient RECs to maintain 100% renewable energy
sources. Please explain your basis for excluding RECs from net electricity costs and
how net electricity costs as presented fully reflect current electricity costs when you
appear to disclose in your filing and prominently disclose on your website that you are
powered by 100% renewable energy and the cost of RECs appears to be a component
of this claim.

November 19, 2024
Page 2
Liquidity and Capital Resources
Historical Cash Flows, page 102
2.Your disclosure of net cash provided by/used in operating, investing and financing
activities appears to repeat information already provided in the statement of cash
flows. Please revise future filings to include a quantitative and qualitative analysis of
the drivers of the change in cash flows between periods and impact to future trends to
provide a sufficient basis to understand changes in cash between periods. Refer to
Item 5B and Instructions 1 and 9 to Item 5 of Form 20-F for guidance.
Notes to the consolidated financial statements
Note 2. Material accounting policies
Revenue and other income recogntion
Bitcoin mining revenue, page F-15
3.We note your bitcoin mining revenue policy. Please address the following:
•You disclose that that your performance obligation is to provide computing power
(hashrate), however we observe that hashrate is speed, generally quoted in
computations per second. We believe your disclosure requires a more precise
description of your performance obligation. Please tell us whether a more accurate
description of your performance obligation is a service to perform hash
calculations for the pool operator, and if so, represent to us that you will revise
your disclosure in future filings.
•You disclose that your mining pool contracts can be terminated at any time by
either party without substantive compensation to the other party for such
termination, that upon termination, the mining pool operator (i.e., the customer) is
only required to pay amounts due related to previously satisfied performance
obligations and that therefore, the duration of the contract is less than 24 hours
and that the contract continuously renews throughout the day. Confirm for us that
your agreements are continually renewed as a result of either party being able to
terminate the agreement at any time without penalty and therefore result in a
duration that is less than 24 hours. If this is true, represent to us that you will
revise your disclosure in future filings to properly state the causal relationship
(i.e., contracts are less than 24 hours in duration as a result of them being
continuously renewed and not vice versa) and link the continuously renewal
determination to the termination rights in your agreements.
You disclose on page 88 and elsewhere that you liquidate all the Bitcoin you mine
daily, that the mining pools you utilize transfer the Bitcoin earned to Kraken on a
daily basis and that you typically withdraw fiat currency proceeds from Kraken on a
daily basis. We note that you also classify receipts from bitcoin mining activities
within cash flows from operating activities. Please address the following:
•Represent to us that you will disclose your accounting policy for crytpo assets in
future filings and separately tell us your basis therefor if you classify bitcoin other
than an intangible asset in accordance with IAS 38.
Tell us how you considered IAS 7.16(b) which gives cash receipts from sales of
intangible assets as an example of cash flows arising from investing activities.
Provide us the general time frame you hold cryptocurrencies mined, including the •4.

November 19, 2024
Page 3
average, maximum and minimum time you held them during the periods
presented.
AI cloud services revenue, page F-16
5.We note that you recognize AI cloud service revenue, which is measured at fair value,
ratably over the enforceable term of the contract as services are provided. Please
address the following:
•Tell us and enhance future filings to more fully describe the AI cloud services you
provide;
•Tell us and enhance future filings to identify the specific rights and performance
obligations of each of the parties in the arrangements for the AI cloud services
you provide, the nature of consideration you receive, i.e. cash or otherwise, and
your application of the authoritative accounting guidance; and
•Tell us whether your AI cloud service contracts meet the definition of a lease
under IFRS 16 and provide a discussion of your analysis.
Note 4. Operating segments, page F-24
6.We note that you disclose Australia as the geographical region for which the
substantial majority of the revenue services were provided whereas you disclose that
the underlying assets utilized to generate these revenues are predominantly located in
North-America. Please tell us your basis for apparently allocating all your mining
revenues to Australia and represent to us that you will disclose the basis for allocating
revenue to individual countries. Refer to IFRS 8: Operating Segments; paragraph
33(a).
Note 14. Property, plant and equipment, page F-33
We note the $91,608,000 of impairment charges recorded in fiscal 2023 and the
reversal of $108,000 of those charges associated with development assets in fiscal
2024. We also note the $12,961,000 impairment of computer hardware prepayments
in fiscal 2023 as disclosed in Note 12 on page F-31. Please address the following as it
relates to the portion of the impairments not associated with the Non-Recourse SPVs
that were deconsolidated on February 3, 2023 and reference for us, where appropriate,
the specific authoritative literature you relied upon to support your accounting:
•Provide us your analyses supporting the impairments of both mining hardware
and computer hardware prepayments. Separately for each of these impairments,
ensure that your response includes, but is not limited to, the following:
oConfirm that you recorded the impairments at December 31, 2022 or tell us
specifically when during the quarter then ended that you recorded the
impairments;
oThe impairment indicators identified;
oHow you determined the recoverable amounts; and
oThe recoverable amounts derived.

 7.

November 19, 2024
Page 4
•As the general market prices of bitcoin improved dramatically during fiscal 2024
(especially toward the middle and latter part of the year) since December 31,
2022, tell us your consideration for reversing part of the impairments recorded.
Note 24. Financial Instruments
Power Supply Agreement, page F-44
8.We note that you entered into a Power Supply Agreement (PSA) for the procurement
of electricity at the Childress site in which you have the right to purchase a fixed
quantity of electricity in advance at a fixed price, with no obligation to take physical
delivery and any unused electricity purchased is sold to the PSA counterparty at the
prevailing spot price at the time of curtailment. Please tell us and enhance future
filings to clarify the following:
•The term of the PSA and total MWs that you have the right to purchase;
•You characterize the electricity financial asset as "prepaid electricity" on page F-
18 and the right to purchase electricity "in advance" on page F-44. In your
response to the preceding bullet, explain how far in advance payments are made
for future electricity purchases and the frequency and timing of additional
payments under the PSA;
•Provide more detail on how you apply the forward price approach identified on
pages F-18 in Note 2 and F-45 in Note 25. In this regard, you indicate that the fair
value of the electricity financial asset is calculated by multiplying the quantity of
electricity prepaid by a forward price in the principal market but it is unclear
whether you prepay for electricity for the entire duration of the PSA. If you do not
prepay for the entire contract, tell us your consideration for valuing the asset over
the entire duration of the contract;
•What the unrealized loss represents if unused electricity is sold and the fair value
is determined using the forward price approach;
•If true, that power usage is not a variable input in fair value determination of the
PSA fair value as under the terms of the PSA, the price and quantity of power are
fixed. If not true, tell us why not; and
•Enhance your rollforward of the change in fair value to disaggregate financial
assets realized between gains and losses and/or change in forward prices for the
periods presented.  In this regard, as you either use power or elect to sell it back in
exchange for credits against future power costs, it would appear that settlements
occur each period. In your response, tell us how settlements are calculated for
purposes of the requested disclosure and how such amounts reconcile to the
realized gain on financial assets recognized of $ 4.1 million.
            In closing, we remind you that the company and its management are responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review, comments,
action or absence of action by the staff.

November 19, 2024
Page 5

            Please contact Michelle Miller at 202-551-3368 or Mark Brunhofer at 202-551-3638
with any questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets
cc:Marcel Fousten