EFRAG does not support interim standard on rate regulation

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

25 May 2013

The European Financial Reporting Advisory Group Technical Expert Group (EFRAG TEG) has published a draft comment letter on the IASB's exposure draft ED/2013/5 'Regulatory Deferral Accounts'. In the proposed comment letter the EFRAG makes clear that it does not agree with the pursuance of this interim project.

The draft comment letter on the Exposure Draft (ED), which was published by the IASB on 25 April 2013, states:


EFRAG does not support the ED because:
  • It results in a lack of comparability between (a) entities that take advantage of the ED and (b) entities that already apply IFRS or do not wish to apply the ED; and
  • It is not limited to facilitating first-time adoption but maintains previous accounting policies for an indefinite period. Other interim standards such as IFRS 4 and IFRS 6 have shown that there was no such thing as a short-term interim standard.

Nevertheless, the EFRAG has also analysed the proposed standard in order to support the IASB in its efforts and has found cross-cutting measurement issues with IFRS 3, IFRS 9 and IAS 39, IAS 12, IAS 28, and IAS 36. The EFRAG also found presentation issues in connection with IFRS 10, IAS 1, and IAS 8. Furthermore, certain difficulties that application of the proposals may raise were identified.

Please click for access to the draft comment letter on the EFRAG website.

EFRAG is seeking for comments on the letter by 21 August 2013.

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