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Rate-regulated activities

IASB Meeting Summaries and Observer Notes

 IASB September 2012


One IASB member was not able to be present for this session. Consequently, only fourteen IASB members voted on each issue.

The IASB discussed their initial views on developing a plan for a standards level project for Rate regulated Activities. The IASB considered whether the project should include the publication of a Discussion Paper (DP). The IASB also discussed whether an interim IFRS should be developed in the shorter term, including different options for such an interim IFRS if the IASB were to decide to develop one.

Restarting the project

At their meeting in May 2012, the IASB expressed their support for a standards level project on Rate regulated Activities. The previous project (which was suspended in September 2010, awaiting the outcome of the Agenda Consultation) had included the publication of an Exposure Draft (ED). Responses to the ED highlighted a diversity of strongly held views which demonstrated differences of interpretation of the Conceptual Framework. At this meeting, the IASB decided to restart the project with the development of a DP. Developing a DP will provide the opportunity for a broader debate on the circumstances in which rate regulated activities may give rise to assets or liabilities.

Thirteen IASB members agreed, one disagreed, preferring the IASB to develop an Exposure Draft as the next step, and one was absent.

The IASB also discussed whether to develop an interim IFRS and considered some alternatives for what type of interim IFRS might be appropriate, such as:

  1. disclosure only requirements;
  2. an IFRS that ‘grandfathers’ existing accounting policies, with some modifications, similar to the approach in IFRS 6 Exploration for and Evaluation of Mineral Resources;
  3. use of national GAAP (either current GAAP for first time adopters or the one used immediately before transition to IFRSs for recent IFRS adopters); or
  4. use of specified accounting requirements for all entities with rate regulated activities, based on one or more existing national GAAP requirements.

At this meeting, the IASB were not asked to make a decision on whether to develop an interim IFRS.

Next steps

The IASB’s initial views on developing an interim IFRS will be taken, in October 2012, to the IFRS Advisory Council, who will be asked for their input. The IASB expect to continue to discuss the Rate regulated Activities project plan later in the year.

Date: 9/26/2012