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Rate-regulated Activities – International Accounting Standards Board

Date recorded:

At its meeting on May 23, 2018, the Board tentatively decided that the measurement of regulatory assets should reflect:

  1. estimates of the future cash flows the regulatory assets will generate. These cash flows include amounts that result from:
    1. the costs of assets used and operating expenses incurred;
    2. any margins on the operating expenses incurred; and
    3. any interest on the operating expenses incurred or returns on the costs of assets used; and
  2. discounting the estimates of future cash flows if there is a significant financing component. The Board also tentatively decided that the measurement of regulatory assets should reflect changes, if any, in the estimates of the future cash flows the regulatory assets will generate. The Board also tentatively decided that the discount rate established at initial recognition should remain unchanged during the subsequent measurement of the regulatory assets. The Board will discuss additional aspects of the measurement of regulatory assets and regulatory liabilities at a future meeting.

Review the IASB Update and podcast on the Board's Web site.

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