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IAS 18, IAS 37 and IAS 39 — Regulatory assets and liabilities

Date recorded:

The Committee received a request to address issues related to rate-regulated activities in circumstances where the local laws permit a regulated entity to recover costs, or be required to refund some amounts, irrespective of whether services are delivered in future periods, although for administrative convenience recovery and refund will normally take place through future billings. In particular, the submitter asked whether the population of customers could be regarded as a single unit of account, and if so, whether it would be acceptable to recognise an asset or liability for over or under billing in a particular period when these items would be recovered or refunded through adjustments to invoices for future services or another mechanism.

The IASB had included requests for views on future plans for this project in its Agenda Consultation published in July 2011. In May 2012, the IASB tentatively agreed to give priority to developing standards-level guidance for rate-regulated activities in its deliberations related to short-term standards-level projects.

The Committee tentatively agreed with the staff’s assessment of the submission against the agenda criteria noting that it was too broad to address within the confines of existing IFRSs and the conceptual framework for the Committee to deal with and that as the IASB had recently expressed support for developing a standards-level project for rate-regulated activities in the short-term, the Committee tentatively decided not to add this issue to its agenda.

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