Related Discussions

• Rate-regulated Activities – International Accounting Standards Board

• Dec 14, 2023

• The IASB met on December 14, 2023, to redeliberate the proposals on the unit of account and on offsetting of regulatory assets and regulatory liabilities for presentation purposes in the Exposure Draft Regulatory Assets and Regulatory Liabilities; to redeliberate the presentation proposals set out in paragraphs 67–68 and 70 of the Exposure Draft and the proposed amendments to IAS 1 Presentation of Financial Statements set out in Appendix D of the Exposure Draft; to discuss its plan to redeliberate other proposals in the Exposure Draft. Those proposals relate to items affecting regulated rates only when related cash is paid or received and to redeliberate a specific topic included in the plan. This topic relates to the measurement and presentation of items affecting regulated rates only when related cash is paid or received—set out in paragraphs 59–66 and 69 of the Exposure Draft.

• Rate-regulated Activities – International Accounting Standards Board

• Sep 20, 2023

• The IASB met on September 20, 2023, to redeliberate the proposals in the Exposure Draft relating to credit and other risks affecting the estimates of future cash flows arising from a regulatory asset or a regulatory liability and to discuss how to use the responses to a survey on the direct (no direct) relationship concept to develop guidance in the prospective Accounting Standard. The IASB tentatively decided that the prospective Accounting Standard would retain the requirement proposed in the Exposure Draft about the estimated future cash flows arising from a regulatory asset or a regulatory liability; specify that if an entity bears credit risk, the entity estimates uncollectible amounts considering the net cash flows that will arise from the recovery of regulatory assets and the fulfilment of regulatory liabilities; and allocates the estimates of uncollectible amounts to regulatory assets only; provide no additional guidance on how an entity accounts for credit risk if the entity is compensated for this risk; and demand risk; and retain the requirement proposed in the Exposure Draft that an entity’s estimates of future cash flows arising from a regulatory liability do not reflect the entity’s own non-performance risk. The IASB tentatively decided that the prospective Accounting Standard would include the direct (no direct) relationship concept to help an entity identify differences in timing arising from the regulatory compensation the entity receives on its regulatory capital base; specify that an entity’s ability to trace differences between the regulatory capital base and the property, plant and equipment at an asset level is a strong indicator that they have a direct relationship; specify that, in the case of service concession arrangements, an entity determines whether the regulatory capital base has a direct (no direct) relationship with the intangible asset that arises from the service concession arrangement; and include examples to illustrate how an entity determines the direct (no direct) relationship using specific fact patterns.

• Rate-regulated Activities – International Accounting Standards Board

• Jun 20, 2023

• The IASB met on June 20, 2023, to discuss its plan to redeliberate the proposals in its Exposure Draft Regulatory Assets and Regulatory Liabilities on the measurement basis, the cash-flow-based measurement technique and the estimation of uncertain future cash flows and to start the redeliberation of specific topics relating to the proposals on estimating uncertain future cash flows.

• Rate-regulated Activities – International Accounting Standards Board

• May 24, 2023

• At its meeting on May 22-24, 2023, the IASB received an update on the status of the project, including the expected timing for completing redeliberations and issuing the prospective Standard and redeliberated the proposals in its Exposure Draft relating to the timing of initial recognition of regulatory assets and regulatory liabilities. The IASB tentatively decided that the prospective Standard would retain the proposal to require recognition of all regulatory assets and all regulatory liabilities existing at the end of the reporting period and the proposal to treat any regulatory assets or regulatory liabilities arising from regulated rates denominated in a foreign currency as monetary items when applying IAS 21 The Effects of Changes in Foreign Exchange Rates.

• Rate-regulated Activities – International Accounting Standards Board

• Apr 25, 2023

• At its meeting on April 25-27, 2023, the IASB redeliberated the proposals in its Exposure Draft Regulatory Assets and Regulatory Liabilities relating to (i) the recognition and measurement of regulatory assets and regulatory liabilities arising from performance incentives that relate to an entity’s performance over several periods (long-term performance incentives); and (ii) the derecognition of regulatory assets and regulatory liabilities. The IASB tentatively decided to retain the proposal to require an entity to estimate the amount of a long-term performance incentive, and to determine the portion of that estimated amount that relates to the reporting period using a reasonable and supportable basis. The IASB tentatively decided that the prospective Standard would (i) require an entity to derecognize (a) a regulatory asset as it recovers part or all of the regulatory asset by adding amounts to future regulated rates charged to customers; and (b) a regulatory liability as it fulfils part or all of the regulatory liability by deducting amounts from future regulated rates charged to customers; (ii) explain that the derecognition of regulatory assets and regulatory liabilities, as described in paragraph (i), is the most common way in which regulatory assets and regulatory liabilities would be derecognized. Therefore, in applying the recognition and measurement requirements at the end of each reporting period, an entity would not be required to consider explicitly when and how its regulatory assets and regulatory liabilities should be derecognized; (iii) clarify that an entity would derecognize a regulatory asset or a regulatory liability if the asset or liability ceased to meet the ‘more likely than not’ recognition threshold; (iv) include guidance on the derecognition of regulatory assets and regulatory liabilities settled by a regulator or another designated body. The guidance would also require an entity to recognize the difference between the derecognized regulatory asset or regulatory liability and any new asset or liability in profit or loss; (v) specify that if a regulatory asset or a regulatory liability is added to or deducted from an entity’s regulatory capital base and the entity’s regulatory capital base has no direct relationship with its property, plant and equipment, the entity would derecognize (a) the regulatory asset and recognize any associated regulatory expense in profit or loss; and (b) the regulatory liability and recognize any associated regulatory income in profit or loss. The IASB also tentatively decided not to include in the prospective Standard any guidance on the securitization of regulatory assets.

• Rate-regulated Activities – International Accounting Standards Board

• Feb 20, 2023

• At its meeting on February 20-23, 2023, the IASB met to discuss its plan to redeliberate the proposed recognition requirements in its Exposure Draft. The IASB was not asked to make any decisions on the plan. The IASB also started to redeliberate specific topics included in the plan relating to: (i) the threshold for the recognition of regulatory assets and regulatory liabilities; (ii) the relationship between an assessment of enforceability and the recognition of regulatory assets and regulatory liabilities; and (iii) the accounting for performance incentives, except those that relate to an entity’s performance over several periods (long-term performance incentives). Following a discussion, the IASB made tentative decisions with respect to (i), (ii) and (iii) The IASB will continue to redeliberate the project proposals at a future meeting.

• Rate-regulated Activities – International Accounting Standards Board

• Dec 13, 2022

• At its meeting on December 13-15, 2022, the IASB met to redeliberate the proposals in its Exposure Draft relating to: (a) the inflation adjustments to an entity’s regulatory capital base; and (b) the accounting for allowable expenses or performance incentives included in an entity’s regulatory capital base. The Board also discussed advice from the Consultative Group for Rate Regulation and the use of the direct (no direct) relationship concept in the IASB’s redeliberations of the proposed model. The IASB made tentative decisions related to (a) and (b). The IASB will continue to redeliberate the project proposals at future meetings.

• Rate-regulated Activities – International Accounting Standards Board

• Nov 22, 2022

• At its meeting on November 22-24, 2022, the IASB met to discuss the accounting for regulatory returns on an asset not yet available for use when an entity capitalizes borrowing costs to construct that asset. Following a discussion, the IASB made tentative decisions in this regard. The IASB will continue to redeliberate the project proposals.

• Rate-regulated Activities – International Accounting Standards Board

• Oct 18, 2022

• At its meeting on October 18-20, 2022, the IASB met to redeliberate the proposals in its Exposure Draft relating to: (i) the proposed definition of allowable expense and the treatment of allowable expenses based on benchmarks; and (ii) accounting for regulatory assets and regulatory liabilities arising from differences between the regulatory recovery period and the assets’ useful lives, The IASB made a number of tentative conclusions in this regard. The IASB also discussed advice from the Consultative Group for Rate Regulation on how the IASB might respond to feedback on these proposals. The IASB will continue to redeliberate the project proposals at a future meeting.

• Rate-regulated Activities – International Accounting Standards Board

• Sep 20, 2022

• At its meeting on September 20-22, 2022, the IASB met to redeliberate the interaction between the proposals in its Exposure Draft and IFRIC 12, Service Concession Arrangements. The IASB tentatively decided that the Standard: (i) clarify the intended interaction between the Standard and IFRIC 12. That is, an entity would apply IFRIC 12 first and then apply the requirements of the Standard to any remaining rights and obligations to determine if the entity has regulatory assets or regulatory liabilities; and (ii) include examples to illustrate that interaction. The IASB will continue to redeliberate the project proposals.

• Rate-regulated Activities - International Accounting Standards Board

• Jul 18, 2022

• 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.

• Rate-regulated Activities – International Accounting Standards Board

• May 23, 2022

• At its meeting on May 23-27, 2022, the IASB met to discuss the main features of different regulatory schemes, the advice from the Consultative Group for Rate Regulation on how the IASB might respond to feedback on its proposals on total allowed compensation in the Exposure Draft and its plans for redeliberating specific topics relating to the proposals on total allowed compensation. The IASB was not asked to make any decisions. At this meeting, the IASB also continued to redeliberate the scope of the proposals. In particular, the IASB discussed (i) application questions relating to the term ‘customers’ in the Exposure Draft; and (ii) the potential scope exclusion of regulatory assets or regulatory liabilities relating to financial instruments within the scope of IFRS 9. The IASB will continue to redeliberate the project proposals at future meetings.

• Rate-regulated Activities – International Accounting Standards Board

• Feb 21, 2022

• At its meeting on February 21-24, 2022, the IASB met to discuss plans for redeliberating specific topics relating to the scope of the proposals in the Exposure Draft. After doing so, the IASB started redeliberating specific topics relating to: (i) determining whether a regulatory agreement is within the scope of the proposals; and (ii) the definition of a regulator. The Board reached a number of tentative conclusions with respect to each of these topics and will continue to redeliberate the project proposals at future meetings.

• Rate-regulated Activities – International Accounting Standards Board

• Dec 14, 2021

• At its meeting on December 14-16, 2021, the IASB agreed on a plan for redeliberating the proposals in its Exposure Draft. The IASB will begin redeliberating the proposals at a future meeting.

• Rate-regulated Activities – International Accounting Standards Board

• Nov 15, 2021

• At its meeting on November 15-19, 2021, the IASB met to complete its discussion of the feedback on its Exposure Draft . The IASB was not asked to make any decisions. The IASB will discuss its plans for redeliberating the project proposals at a future meeting.

• Rate-regulated Activities – International Accounting Standards Board

• Oct 25, 2021

• At its meeting on October 25-28, 2021, the IASB met to discuss feedback on its Exposure Draft. The Board was not asked to make any decisions. The Board will continue discussing feedback on the Exposure Draft at its next meeting.

• Rate-regulated Activities – AcSB

• Jul 21, 2021

• At its meeting on July 21-22, 2021, the AcSB discussed a revised draft of its response letter to the IASB’s Exposure Draft, “Regulatory Assets and Regulatory Liabilities.” The Board approved its response letter, subject to final edits. The AcSB submitted its response letter to the IASB by the July 30, 2021, deadline.

• Rate-regulated Activities – AcSB

• May 19, 2021

• At its meeting on May 19, 2021, the AcSB had its first discussion on the key points to include in its response letter to the International Accounting Standards Board’s (IASB) Exposure Draft. The Board considered stakeholder feedback obtained to date through its outreach activities on this topic. The Board will discuss an initial draft of its response letter at its June 16-17, 2021, meeting. The AcSB encourages stakeholders to share their views on the Exposure Draft by attending an upcoming virtual roundtable on June 22 (English) and June 23 (French). Stakeholders can also share their views on the Exposure Draft by submitting comment letters to the IASB by July 30, 2021, with a copy to the AcSB. If respondents would like the Board to consider their comments when drafting its letter to the IASB, they should submit their response letters to the AcSB by July 15, 2021.

• Rate-regulated Activities – International Accounting Standards Board

• Mar 23, 2021

• At its meeting on March 23-24, 2021, the IASB decided to extend the comment period for the Exposure Draft, Regulatory Assets and Regulatory Liabilities, by 30 days to end on July 30, 2021.

• Rate-regulated Activities – AcSB

• Feb 04, 2021

• At its meeting on February 4, 2021, the AcSB discussed and approved a plan to respond to the Exposure Draft, which includes undertaking activities such as: (i) hosting a panel discussion to raise awareness of the IASB’s proposed accounting model and how it compares to the U.S. GAAP accounting model and the current accounting under IFRS 14, Regulatory Deferral Accounts; (ii) undertaking targeted stakeholder group outreach; and (iii) consulting with the Board’s advisory committees. The AcSB will also hold roundtables for stakeholders across Canada to provide input on the Exposure Draft.

• Rate-regulated Activities – International Accounting Standards Board

• Sep 22, 2020

• At its meeting on September 22-23, 2020, the IASB met to discuss sweep issues identified in drafting the Exposure Draft, Regulatory Assets and Regulatory Liabilities, as follows: (i) definitions of a regulatory asset and a regulatory liability; (ii) regulatory returns on assets not yet available for use; (iii) effective date; and (iv) comment period. The Board tentatively decided that: (a) a regulatory asset is ‘an enforceable present right, created by a regulatory agreement, to add an amount in determining a regulated rate to be charged to customers in future periods because part of the total allowed compensation for goods or services already supplied will be included in revenue in the future’. (b) a regulatory liability is ‘an enforceable present obligation, created by a regulatory agreement, to deduct an amount in determining a regulated rate to be charged to customers in future periods because the revenue already recognized includes an amount that will provide part of the total allowed compensation for goods or services to be supplied in the future’. (c) the regulatory return on a balance relating to an asset not yet available for use forms part of the total allowed compensation for goods or services supplied once the asset is available for use and over the remaining periods in which an entity recovers the carrying amount of the asset through the regulated rates. The entity shall use a reasonable and consistent basis in determining how to allocate the return on that balance over those remaining periods. (d) an entity be required to apply the final Standard for annual reporting periods beginning on or after a date 18–24 months from the date of its publication. (e) the comment period for the Exposure Draft be extended from 120 days to 150 days. This meeting completes the public discussions for this project. The Board expects to publish its Exposure Draft in January 2021.

• Rate-regulated Activities – International Accounting Standards Board

• Mar 19, 2020

• At its meeting on March 19, 2020, the IASB met to discuss the treatment of ‘target profit’ in the accounting model it is developing for regulatory assets and regulatory liabilities. Target profit is the profit that an entity is entitled to include in the regulated rate. Principles that the Board had already discussed establish when the following elements of target profit are part of total allowed compensation: (a) regulatory interest—over the period in which the related regulatory asset or regulatory liability is outstanding; and (b) profit margins that vary with the amount of an expense, for example, a fixed percentage mark-up on the expense—when the related expense is recognized in accordance with IFRS Standards. At this meeting, the Board tentatively decided that: (i) regulatory returns on a construction work-in-progress base included in the regulated rates charged to customers during the construction period form part of total allowed compensation only during the period when the asset is in operation and is being used to supply goods or services; (ii) performance incentives (whether construction-related or non-construction-related) form part of total allowed compensation for goods or services supplied in the period over which the relevant performance criteria are monitored and evaluated; and (iii) all other elements of target profit that a regulatory agreement entitles an entity to charge customers in a period, including regulatory returns on a regulatory capital base, form part of total allowed compensation for goods or services supplied in that period. The Board expects to publish an exposure draft in the second half of 2020.

• Rate-regulated Activities – International Accounting Standards Board

• Sep 25, 2019

• At its meeting on September 25, 2019, the IASB met to discuss the accounting model (model) being developed for regulatory assets and regulatory liabilities. For information only, a summary was provided of the tentative decisions made by the Board that determine the features of the model. The Board made further tentative decisions related to (i) an analysis of the regulatory agreement boundary; (ii) amendments to other IFRS standards; and (iii) transition. The Board now expects to publish an Exposure Draft in the second quarter of 2020.

• Rate-regulated Activities – International Accounting Standards Board

• Jul 22, 2019

• At its meeting on July 22-25, 2019, the Board continued its discussion of the accounting model being developed for regulatory assets and regulatory liabilities, including: (i) interactions between the model and IFRS 3, Business Combinations; (ii) application of the model in certain situations; (iii) whether the consultation document would be an exposure draft or a discussion paper (the Board concluded that it would be an exposure draft); and (iv) an effects analysis. The Board reviewed the due process steps it has taken in developing the model and concluded that they are satisfied that the Board has complied with applicable due process steps and instructed the staff to prepare an exposure draft for balloting. The Board also decided to set a comment period of 120 days for the exposure draft. The staff expects the Board to discuss a number of remaining issues at its September meeting and that the exposure draft will be issued for comment in Q1/2020.

• Rate-regulated Activities – International Accounting Standards Board

• Jun 18, 2019

• At its meeting on June 18, 2019, the Board discussed and made tentative conclusions with respect to the following issues: (i) general principles, including scope and definitions of regulatory assets and regulatory liabilities; (ii) measurement; and (iii) presentation and disclosure. The Board expects to complete its discussion of the model in Q3 2019, when the staff expect to ask for permission to begin drafting an Exposure Draft. The Board anticipate publication of the consultation document in Q1 2020.