International Financial Reporting Standard 14 Regulatory Deferral Accounts (IFRS 14)
The objective of this Standard is to specify the financial reporting requirements for regulatory deferral account balances that arise when an entity provides goods or services to customers at a price or rate that is subject to rate regulation.
An entity is permitted to apply the requirements of this Standard in its first IFRS financial statements if and only if it:
(a) conducts rate-regulated activities; and
(b) recognised amounts that qualify as regulatory deferral account balances in its financial statements in accordance with its previous GAAP.
An entity that has rate-regulated activities and that is within the scope of, and elects to apply, this Standard shall apply paragraphs 10 and 12 of IAS 8 when developing its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. An entity that has rate-regulated activities and that is within the scope of, and elects to apply, this Standard shall apply paragraphs 10 and 12 of IAS 8 when developing its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances.
On initial application of this Standard, an entity shall continue to apply its
previous GAAP accounting policies for the recognition, measurement, impairment
and derecognition of regulatory deferral account balances,
except for any changes permitted by paragraphs 13-15.
However, the presentation of such amounts shall comply with the presentation
requirements of this Standard, which may require changes to the entity's
previous GAAP presentation policies (see paragraphs 18-19).
An entity shall not change its accounting policies in order to start to
recognise regulatory deferral account balances. An
entity may only change its accounting policies for the recognition,
measurement, impairment and derecognition of regulatory deferral account
balances if the change makes the financial statements more relevant to the
economic decision-making needs of users and no less reliable1, or more reliable and no less relevant to those needs. An
entity shall judge relevance and reliability using the criteria in paragraph 10 of IAS 8.
An entity shall present separate line items in the statement of financial position for:
(a) the total of all regulatory deferral account debit balances; and
(b) the total of all regulatory deferral account credit balances.
When an entity presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, it shall not classify the totals of regulatory deferral account balances as current or non-current. Instead, the separate line items required by paragraph 20 shall be distinguished from the assets and liabilities that are presented in accordance with other Standards by the use of sub-totals, which are drawn before the regulatory deferral account balances are presented.
An entity that elects to apply this Standard shall disclose information that
enables users to assess:
(a) the nature of, and the risks associated with, the rate regulation that establishes the price(s) that the entity can charge customers for the goods or services it provides; and
(b) the effects of that rate regulation on its financial position, financial performance and cash flows.