We support the Board's efforts to address differences in practice regarding the recognition of assets and liabilities arising from rate regulation. We agree that only the regulated entities proposed by the scope of the standard should be able to recognise regulatory assets and liabilities.

However, we believe the ED's current scope criteria, as currently worded, would create confusion for entities proposed to be outside the scope of the final standard. In our view, this may result in entities asserting they are within the scope and applying the principles contained in the ED by merely analogising to their particular situation even though technically they do not meet the established criteria. We would prefer the final Standard's scope include all entities' operating activities whose prices are subject to regulation, and then subject all such entities to established recognition criteria. Expanding the scope to all rate-regulated entities will help alleviate our concern as it becomes a question of whether an entity meets the recognition criteria for it to be able to recognise a regulatory asset or liability. Entities within the scope of the standard, but not meeting the recognition criteria would be prohibited from recognising regulatory assets and liabilities under this [draft] IFRS. The risk of entities the Board did not intend to recognise regulatory assets and liabilities doing so would therefore be lessened.