UK Endorsement Board publishes its final comment letter on the IASB’s ED Regulatory Assets and Regulatory Liabilities

  • UK Endorsement Board (UKEB) Image

06 Aug, 2021

The UK Endorsement Board (UKEB) has published its final comment letter on the International Accounting Standard Board’s (IASB's) Exposure Draft ED/2021/1 'Regulatory Assets and Regulatory Liabilities'.

Overall the UKEB supports the proposals in the Exposure Draft.  It does, however, make a number of recommendations to enhance the proposals including that:

  • The proposed standard should be explicit that the agreements intended to be included in the scope of the definition “regulatory agreement” are a small subset of regulatory agreements. 
  • The proposed standard should explicitly exclude service concession arrangements from its scope unless there is clear evidence that users would gain additional information from the application of both IFRIC 12 and the proposed standard to such agreements.
  • The proposed standard should require an entity's regulator to be an independent third-party.
  • Regulatory returns relating to assets not yet available for use in Total Allowable Compensation (TAC) should follow the economic substance of the requirements in the regulatory agreements.

The final comment letter is available on the UKEB website.

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