Rate regulation is the setting by regulatory bodies or governments of prices that can be charged to customers for services or products through regulations, often where an entity has a monopoly or dominant market position that gives it significant market power.
The issue to be addressed by this project is whether IFRSs should require entities operating in rate-regulated environments to recognise assets and liabilities arising from the effects of rate regulation. Some national GAAP provides specific guidance on this matter, but there is no equivalent guidance in IFRSs.
The IASB reactivated this project as part of its response to the Agenda Consultation 2011, and will consider an interim standard for entities adopting IFRS that would allow entities adopting IFRS to continue to use their local GAAP requirements for rate-regulated activities until the comprehensive project is completed.
Current status of the project
This project was reactivated in 2012, and is expected to be completed in two phases:
|Interim standard (to allow previous GAAP to be used)||Exposure Draft ED/2013/5 Regulatory Deferral Accounts was issued on 25 April 2013, with comments due by 4 September 2013|
|Comprehensive project||Request for Information Rate Regulation issued in the first quarter of 2013, to be followed by a Discussion Paper in the fourth quarter of 2013|
|December 2008||Added to the IASB's active agenda|
|22 July 2009||Exposure Draft ED/2009/8 Rate-regulated Activities issued||Comment deadline 20 November 2009|
|September 2010||IASB decided to defer the project|
|December 2012||Reactivated as an active project||The IASB will consider an interim standard for entities adopting IFRS before completing a comprehensive project|
|28 March 2013||Request for Information Rate Regulation issued||Comment deadline 30 May 2013|
|25 April 2013||Exposure Draft ED/2013/5 Regulatory Deferral Accounts issued
||Comment deadline 4 September 2013|
|29 April 2013||Consultative group established||Details|