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IASB publishes Request for Information on rate regulation

  • IASB (International Accounting Standards Board) Image

Mar 28, 2013

The IASB has issued a Request for Information (RFI) seeking comments from stakeholders to identify high-level overviews of rate-regulatory schemes that should be included as part of the scope in the development of a discussion paper.

The rate regulation project was originally added to the IASB's technical agenda in December 2008, and an exposure draft was published on July 22, 2009. Comments received on the exposure expressed divergent views. No consensus was ever reached and the project was therefore suspended in September 2010.

The IASB has reactivated this project as part of its response to the Agenda Consultation 2011. The RFI is an early step the IASB is taking to reactivate the project. The RFI, along with other research, will be used in the development of a discussion paper (DP). The goal of the DP is "to identify what information about the consequences of rate regulation would be most useful for users of IFRS financial statements and whether the IASB should develop specific guidance for accounting for those consequences."

Summary of questions asked in the Request for Information
Question 1 — What types of goods or services are subject to the rate regulation described for consideration in the DP?
Question 2 — What are the objectives of the rate regulation and how do they influence the interaction among the rate regulator, the rate-regulated entity, and the customer?
Question 3 — What sort of rights or obligations does the regulation create?
Question 4 — In relation to the rights or obligations identified in the comments to Question 3, how does the rate-regulated entity enforce its rights, or how does the rate regulator enforce the settlement of the rate-regulated entity's obligations?
Question 5 — How does the rate regulation ensure the recovery or reversal of under- or over-recoveries of allowable costs (i.e., variance amounts) (if applicable)? Are these mechanisms effective in recovering or reversing those amounts within the targeted timeframe?

The comment deadline was May 30, 2013.

More information is available on the IASB's Web site.

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