Rate-regulated Activities - International Accounting Standards Board

Date recorded:

At its meeting on July 18-21, 2022, the IASB met to redeliberate the proposals in its Exposure Draft on total allowed compensation. In particular, the IASB discussed: (i) components of total allowed compensation; and (ii) regulatory returns on an asset not yet available for use. With respect to components of total allowed compensation, the IASB tentatively decided that in the Standard, the application guidance focus on: (a) helping entities to identify differences in timing instead of specifying the components of total allowed compensation; and (b) the most common differences in timing that could arise from various types of regulatory schemes. With respect to regulatory returns on an asset not yet available for use, the IASB tentatively decided that the Standard specify that when an entity has an enforceable present right to regulatory returns on an asset not yet available for use, those returns would form part of the total allowed compensation for goods or services supplied during the construction period of that asset. The Standard will provide guidance for entities to assess whether their rights to these regulatory returns are enforceable. The IASB will continue to redeliberate the project proposals.

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

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