25 April 2013
The International Accounting Standards Board (IASB) today published
for public comment the Exposure Draft Regulatory Deferral Accounts as part of
its reactivated Rate-regulated Activities research project.
Many jurisdictions applying International Financial Reporting Standards
(IFRS) have industry sectors that are subject to rate regulation, such as the
transportation and the utilities sectors. Rate regulation can have a
significant impact on the timing and amount of an entity´s revenue.
Existing IFRS does not provide any specific guidance for rate regulated
activities.
In response to feedback from its agenda consultation, the
IASB has initiated a project to consider whether the IASB should develop
specific guidance for Rate-regulated Activities and, if so, what information
about the consequences of rate regulation would be most useful for users of
financial statements. At this stage, the IASB is proposing an interim
Standard that would allow entities to preserve the existing accounting policies
that they have in place for rate-regulated activities with some modifications
designed to enhance comparability. The proposals are open
for comment until 4 September 2013.
Commenting on the
publication of the Exposure Draft, Ian Mackintosh, Vice-Chairman of the IASB
said:
"This is an important project for the many jurisdictions with large rate-regulated entities. Completing the project will take some time, due to the many different rate-regulatory models in use around the world. Consequently, we are proposing some interim measures to enhance the comparability of financial reporting by entities with rate-regulated activities until guidance is developed through the IASB´s comprehensive Rate-regulated Activities project."