The IASB published for public comment the ED 'Regulatory Deferral Accounts', as part of its reactivated Rate-regulated Activities research project. The proposals are open for comment until 4 September, 2013.
Many jurisdictions applying IFRS have industry sectors that are subject to rate regulation, such as the transportation and the utilities sectors. Rate regulation can have a significant impact on the timing and amount of an entity’s revenue. Existing IFRS does not provide any specific guidance for rate regulated activities.
In response to feedback from its agenda consultation, the IASB has initiated a project to consider whether the IASB should develop specific guidance for Rate-regulated Activities and, if so, what information about the consequences of rate regulation would be most useful for users of financial statements. At this stage, the IASB is proposing an interim Standard that would allow entities to preserve the existing accounting policies that they have in place for rate-regulated activities with some modifications designed to enhance comparability.
Commenting on the publication of the Exposure Draft, Ian Mackintosh, Vice-Chairman of the IASB said: ”This is an important project for the many jurisdictions with large rate-regulated entities. Completing the project will take some time, due to the many different rate-regulatory models in use around the world. Consequently, we are proposing some interim measures to enhance the comparability of financial reporting by entities with rate-regulated activities until guidance is developed through the IASB’s comprehensive Rate-regulated Activities project.”
Press release
Exposure draft
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