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The International Accounting Standards Board (IASB) is redeliberating proposals in the Exposure Draft Regulatory Assets and Regulatory Liabilities.

The Exposure Draft, published in January 2021, sets out the IASB’s proposals for a model to account for regulatory assets and regulatory liabilities. If issued as a new IFRS Accounting Standard, the proposals would replace IFRS 14 Regulatory Deferral Accounts. 

The IASB discussed feedback on the Exposure Draft in October and November 2021. 

IASB® Update May 2024

The IASB met on 22 May 2024 to redeliberate:

  • the proposed guidance on the interaction between the proposals in the Exposure Draft Regulatory Assets and Regulatory Liabilities (Exposure Draft) and IAS 12 Income Taxes (Agenda Paper 9A); and
  • the proposed amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors in the Exposure Draft (Agenda Paper 9B).

The IASB also considered comments about other IFRS Accounting Standards for which no amendments are proposed in the Exposure Draft (Agenda Paper 9B).

Interaction with IAS 12 (Agenda Paper 9A)

Regarding the prospective IFRS Accounting Standard on rate-regulated activities, the IASB tentatively decided to clarify that:

  1. the income tax consequences of a regulatory asset or regulatory liability might give rise to a separate regulatory asset or regulatory liability; and
  2. an entity would determine the tax base of a regulatory asset or regulatory liability by applying the requirements in IAS 12.

All 14 IASB members agreed with these decisions.

Amendments to IAS 8 and suggested amendments to other IFRS Accounting Standards (Agenda Paper 9B)

The IASB tentatively decided to retain the proposal in the Exposure Draft to delete the temporary exception in paragraph 54G of IAS 8. This exception requires an entity developing an accounting policy for regulatory account balances to refer to the Framework for the Preparation and Presentation of Financial Statements instead of the Conceptual Framework for Financial Reporting issued in 2018.

All 14 IASB members agreed with this decision.

Next milestone

IFRS Accounting Standard