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In January 2021 the International Accounting Standards Board (IASB) published its Exposure Draft Regulatory Assets and Regulatory Liabilities. The Exposure Draft sets out the IASB’s proposals for a model to account for regulatory assets and regulatory liabilities. 

The IASB discussed feedback on the Exposure Draft in October and November 2021 and its plans for redeliberating the proposals in the Exposure Draft in December 2021.

In July 2024, following completion of the redeliberations of the proposals in the Exposure Draft, the IASB confirmed it was satisfied that applicable due process requirements have been complied with and sufficient consultation and analysis were undertaken to begin the process for balloting the new IFRS Accounting Standard.

The IASB expects to publish the new Standard in the second half of 2025.  The new Standard will replace IFRS 14 Regulatory Deferral Accounts. 

IASB® Update May 2025

The IASB met on 19 May 2025 to discuss sweep issues identified in drafting the prospective IFRS Accounting Standard Regulatory Assets and Regulatory Liabilities (prospective Accounting Standard).

The IASB tentatively decided that the prospective Accounting Standard would:

  1. include no requirements for a minimum interest rate.
  2. include a requirement for an entity to disclose quantitative information, using time bands, about when it expects to recover regulatory assets and fulfil regulatory liabilities. The entity would be required to disaggregate the quantitative information between regulatory assets and regulatory liabilities for which the regulatory agreement:
    1. provides or charges a regulatory interest rate; and
    2. does not provide or charge a regulatory interest rate.
  3. include a requirement for an entity to provide the quantitative information described in (b) using:
    1. undiscounted cash flows; and
    2. reasonable and supportable assumptions about the timing of future cash flows that are consistent between periods.
  4. clarify that assumptions about market variables used in the estimates of future cash flows:
    1. should be consistent with observable market prices at the measurement date; and
    2. should not take into account the effects of possible future changes in market variables.
  5. include transitional requirements for interim financial statements.
  6. include no requirement for an entity to disclose whether it receives regulatory returns on an asset not yet available for use.

Twelve of 14 IASB members agreed with decisions (a), (b), (c)(ii) and (d). 

All 14 IASB members agreed with decisions (c)(i) and (f). 

Thirteen of 14 IASB members agreed with decision (e).

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IFRS Accounting Standard