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example17 2006-12-31 example17 2007-12-31 example17 2006-01-01 2006-12-31 example17 2007-01-01 2007-12-31 example17 2006-12-31 example17a:ConstructionCostsMember ifrs-full:ElectricityDistributionMember example17 2006-12-31 example17a:StormDamageMember ifrs-full:ElectricityDistributionMember example17 2006-12-31 example17a:OtherRegulatoryAccountsMember ifrs-full:ElectricityDistributionMember example17 2006-12-31 example17a:LandDisposalMember ifrs-full:ElectricityDistributionMember example17 2006-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:ElectricityDistributionMember example17 2006-12-31 example17a:PensionCostsMember ifrs-full:GasDistributionMember example17 2006-12-31 example17a:GasCostsVariancesMember ifrs-full:GasDistributionMember example17 2006-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:GasDistributionMember example17 2006-12-31 example17a:DecommissioningCostsMember ifrs-full:GasDistributionMember example17 2007-01-01 2007-12-31 example17a:ConstructionCostsMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:ConstructionCostsMember ifrs-full:ElectricityDistributionMember example17 2007-01-01 2007-12-31 example17a:StormDamageMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:StormDamageMember ifrs-full:ElectricityDistributionMember example17 2007-01-01 2007-12-31 example17a:OtherRegulatoryAccountsMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:OtherRegulatoryAccountsMember ifrs-full:ElectricityDistributionMember example17 2007-01-01 2007-12-31 example17a:LandDisposalMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:LandDisposalMember ifrs-full:ElectricityDistributionMember example17 2007-01-01 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:ElectricityDistributionMember example17 2007-01-01 2007-12-31 example17a:PensionCostsMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:PensionCostsMember ifrs-full:GasDistributionMember example17 2007-01-01 2007-12-31 example17a:GasCostsVariancesMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:GasCostsVariancesMember ifrs-full:GasDistributionMember example17 2007-01-01 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:GasDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:GasDistributionMember example17 2007-01-01 2007-12-31 example17a:DecommissioningCostsMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:DecommissioningCostsMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:ConstructionCostsMember ifrs-full:BottomOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:ConstructionCostsMember ifrs-full:TopOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:OtherRegulatoryAccountsMember ifrs-full:BottomOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 example17a:OtherRegulatoryAccountsMember ifrs-full:TopOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:BottomOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:TopOfRangeMember ifrs-full:ElectricityDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:BottomOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember ifrs-full:TopOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:GasCostsVariancesMember ifrs-full:BottomOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:GasCostsVariancesMember ifrs-full:TopOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:DecommissioningCostsMember ifrs-full:BottomOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 example17a:DecommissioningCostsMember ifrs-full:TopOfRangeMember ifrs-full:GasDistributionMember example17 2007-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember example17 2006-12-31 ifrs-full:TaxationrelatedRegulatoryDeferralAccountBalancesMember iso4217:EUR xbrli:pure

IFRS Taxonomy 2014 – Illustrative examples

IFRS 14 Regulatory Deferral Accounts
Illustrative examples - example 17a

These examples accompany, but are not part of, the Standard.

Regulatory deferral account balances


Example 1—Illustrative presentation of financial statements

Paragraphs 20–25 of this Standard require an entity to present regulatory deferral account debit balances and credit balances and any related deferred tax asset (liability) and the net movement in those balances as separate line items in the statement of financial position and the statement(s) of profit or loss and other comprehensive income respectively. Sub-totals are drawn before the regulatory line items are presented. In addition, paragraph 26 requires an entity to present additional basic and diluted earnings per share, which are calculated by excluding the net movement in regulatory deferral account balances, when the entity presents earnings per share in accordance with IAS 33 Earnings per Share. Example 1 illustrates how these requirements might be met, but is not intended to illustrate all aspects of this Standard or IFRS more generally.

XYZ Group—Statement of financial position as at 31 December 20X7(in currency units)

31 Dec 20X7

31 Dec 20X6

ASSETS

Non-current assets

Property, plant and equipment

350,700

360,020

Goodwill

80,800

91,200

Other intangible assets

227,470

227,470

Investments in associates

100,150

110,770

Investments in equity instruments

129,790

146,460

888,910

935,920

Current assets

Inventories

135,230

132,500

Trade receivables

91,600

110,800

Other current assets

25,650

12,540

Cash and cash equivalents

212,160

220,570

464,640

476,410

Total assets

1,353,550

1,412,330

Regulatory deferral account debit balances and related deferred tax asset

112,950

111,870

Total assets and regulatory deferral account debit balances

1,466,500

1,524,200

       

Note: The aggregated total that is presented for regulatory deferral account debit balances and the related deferred tax asset includes the sum of the regulatory deferral account debit balances of CU100,240 (20X6 – CU102,330) plus the deferred tax asset that is related to the recognition of regulatory deferral account balances of CU12,710 (20X6 – CU9,540). This aggregated presentation is permitted by paragraphs 24 and B11 of this Standard. An alternative disaggregated presentation is illustrated in Example 2.

XYZ Group—Statement of financial position as at 31 December 20X7(in currency units)

31 Dec 20X7

31 Dec 20X6

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital

650,000

600,000

Retained earnings

243,500

164,500

Other components of equity

10,200

21,200

903,700

785,700

Non-controlling interests

70,050

45,800

Total equity

973,750

831,500

Non-current liabilities

Long-term borrowings

120,000

160,000

Deferred tax

28,800

 

26,040

Long-term provisions

28,850

52,240

177,650

238,280

Current liabilities

Trade and other payables

87,140

111,150

Short-term borrowings

80,000

200,000

Current portion of long-term borrowings

10,000

20,000

Current tax payable

35,000

42,000

Short-term provisions

5,000

4,800

217,140

377,950

Total liabilities

394,790

616,230

Total equity and liabilities

1,368,540

1,447,730

Regulatory deferral account credit balances

97,960

76,470

Total equity, liabilities and regulatory deferral account credit balances

1,466,500

1,524,200

Note: regulatory deferral account balances are not described as assets or liabilities for the purposes of this Standard. The sub-totals described as “Total assets” and “Total liabilities” are comparable to those that would be presented if the regulatory deferral account balances were not recognised. The difference between these two sub-totals represents the net balance of all regulatory deferral account balances recognised and any related deferred tax asset (liability) that arises as a result of recognising regulatory deferral account balances, which would otherwise be recognised within retained earnings or other components of equity.

XYZ Group—Statement of profit or loss and other comprehensive income for the year ended 31 December 20X7(illustrating the presentation of profit or loss and other comprehensive income in one statement and the classification of expenses within profit or loss by function)(in currency units)

20X7

20X6

Revenue

390,000

358,784

Cost of sales

(237,062)

(230,000)

Gross profit

152,938

128,784

Other income

44,247

16,220

Distribution costs

(9,000)

(13,700)

Administrative expenses

(20,000)

(31,500)

Other expenses

(2,100)

(1,200)

Finance costs

(8,000)

(7,500)

Share of profit of associates

35,100

15,100

Profit before tax

193,185

106,204

Income tax expense

(43,587)

(44,320)

Profit for the year before net movements in regulatory deferral account balances

149,598

61,884

Net movement in regulatory deferral account balances related to profit or loss and the related deferred tax movement

(27,550)

3,193

Profit for the year and net movements in regulatory deferral account balances

122,048

65,077

Other comprehensive income: Items that will not be reclassified to profit or loss

Remeasurement of defined benefit pension plans

(7,938)

(3,784)

Net movement in regulatory deferral account balances related to other comprehensive income

7,140

4,207

Other comprehensive income for the year, net of income tax

(798)

423

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

121,250

65,500

Profit and net movements in regulatory deferral account balances attributable to:

Owners of the parent

97,798

51,977

Non-controlling interests

24,250

13,100

122,048

65,077

Total comprehensive income attributable to

Owners of the parent

97,000

52,400

Non-controlling interests

24,250

13,100

121,250

65,500

Earnings per share

(in currency units):

Basic and diluted

0.61

0.35

Basic and diluted including net movement in regulatory deferral account balances

0.46

0.30

       

Notes:

(1)

To simplify the example, it is assumed that all regulatory deferral account balances relate to activities that are carried out in wholly-owned subsidiaries and thus no amounts are attributable to non-controlling interests.

(2) The aggregated total that is presented for the net movement in regulatory deferral account balances related to profit or loss and the related deferred tax movement includes the net movement in regulatory deferral account balances of CU30,720 (20X6 – CU9,127) and the movement in the related deferred tax asset that is related to the recognition of regulatory deferral account balances, which is CU3,170 (20X6 – CU12,320). This aggregated presentation is permitted by paragraphs 24 and B12 of this Standard. An alternative disaggregated presentation is illustrated in Example 2.

For each type of rate-regulated activity, paragraph 33 requires an entity to present, for each class of regulatory deferral account balance, a reconciliation of the carrying amount at the beginning and the end of the period. This example illustrates how that requirement may be met for an entity with two types of rate-regulated activity (electricity distribution and gas distribution), but is not intended to illustrate all aspects of this Standard or IFRS more generally.

Regulatory deferral account balances

Regulatory deferral account debit balances

20X6

Balances arising in the period

Recovery/reversal

20X7

Remaining recovery/ reversal period (years)

Electricity distribution

Construction costs

18,720

5,440

(80)

24,080

4-10

Storm damage

64,410

(12,060)

52,350

4

Other regulatory accounts

6,270

2,320

(950)

7,640

4-10

Gas distribution

Pension costs

5,130

10,120

(2,980)

12,270

N/A

Gas cost variances

7,800

(3,900)

3,900

1

102,330

17,880

(19,970)

100,240

Regulatory deferral account credit balances

Electricity distribution

Land disposal

19,000

19,000

10

Income tax

6,360

3,207

(1,093)

8,474

110

Gas distribution

Gas cost variances

600

4,000

(200)

4,400

23

Income tax

3,180

1,603

(547)

4,236

110

Decommissioning costs

66,330

(2,030)

(2,450)

61,850

320

76,470

25,780

(4,290)

97,960

     
Notes:
(1) Construction costs consist of costs that are not permitted to be included in the cost of property, plant and equipment in accordance with IAS 16 Property, Plant and Equipment.
(2) Other regulatory accounts include regulatory deferral account debit balances that are individually immaterial.
(3) The net movement in the pension costs regulatory deferral account balance of CU7,140 (CU12,270 – CU5,130) relates to the remeasurement of the defined benefit pension plan, which is presented in other comprehensive income in accordance with IAS 19 Employee Benefits. In accordance with paragraph 22 of this Standard, the related movement in the regulatory deferral account balance is also presented in other comprehensive income.
(4) The recovery from, or refund to, customers of future income taxes through future rates is recognised as a regulatory deferral account balance. The company has recognised a deferred tax asset of CU12,710 (20X6 – CU9,540) arising from the recognition of regulatory deferral account balances and a corresponding regulatory deferral account credit balance of CU12,710 (20X6 – CU9,540). The deferred tax asset balance is presented within the total regulatory deferral account debit balances presented in the statement of financial position.
(5) The net movement of CU30,720 in the remaining regulatory deferral account balances is presented in the profit or loss section of the statement of profit or loss and other comprehensive income, net of the movement in the deferred tax asset related to the regulatory deferral account balances of CU3,170 [CU (8,4746,360) + CU (4,2363,180)]. The remaining net movement of CU30,720 consists of:
Decrease in regulatory deferral account debit balances(CU100,240 – CU102,330) (2,090)
Less: increase in pension cost regulatory deferral account debit balance presented in other comprehensive income(CU12,270 – CU5,130) (7,140)
(9,230)
Increase in regulatory deferral account credit balances(CU97,960 – CU76,470) (21,490)
Net movement in regulatory deferral account balances presented in profit or loss 30,720
     

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