Sunday 26 October 2014
The objective of the interim Standard, IFRS 14 Regulatory Deferral Accounts is to enhance the comparability of financial reporting by entities with rate-regulated activities until the IASB completes its comprehensive project on rate regulation.
The requirements of some national accounting standard-setting bodies permit or require entities that are subject to certain types of rate regulation to capitalise and defer expenditures (or income) that would otherwise be recognised as expenses (or income) in the statement of profit or loss and other comprehensive income by non-rate-regulated entities. These amounts are often referred to as 'regulatory deferral' (or 'variance') accounts. There is currently no Standard in IFRS that specifically addresses the accounting for rate-regulated activities.
The IASB recognises that discontinuing the recognition of regulatory deferral account balances before the completion of the comprehensive Rate-regulated Activities project could be a significant barrier to the adoption of IFRS for those entities for which regulatory deferral account balances represent a significant proportion of net assets. The IASB has, therefore, issued IFRS 14 to allow those entities that currently recognise regulatory deferral account balances in accordance with their previous GAAP to continue to do so when making the transition to IFRS.
IASB issues interim Standard on rate-regulated activities
IASB announces membership of Consultative Group for rate regulation
IASB issues proposals for an interim Standard on rate regulation
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