International Financial Reporting Standard 14 Regulatory Deferral Accounts (IFRS 14) is set out in paragraphs 1⁠–⁠36 and Appendices A⁠–⁠D. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. Terms defined in Appendix A are in italics the first time that they appear in the Standard. Definitions of other terms are given in the Glossary for International Financial Reporting Standards. The Standard should be read in the context of its objective and the Basis for Conclusions, the Preface to IFRS Standards and the Conceptual Framework for Financial Reporting. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance. [Refer:IAS 8 paragraphs 10⁠–⁠12. However, in this case, refer also to IFRS 14 paragraphs 9, 10 and 13⁠–⁠15.]

International Financial Reporting Standard 14Regulatory Deferral Accounts

Objective

[Refer:Basis for Conclusions paragraphs BC1⁠–⁠BC21]

1

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.

2

In meeting this objective, the Standard requires:

(a)

limited changes to the accounting policies that were applied in accordance with previous generally accepted accounting principles (previous GAAP) for regulatory deferral account balances, which are primarily related to the presentation of these accounts; [Link toparagraphs 18⁠–⁠26] and

(b)

disclosures that:

(i)

identify and explain the amounts recognised in the entity’s financial statements that arise from rate regulation; and

(ii)

help users of the financial statements to understand the amount, timing and uncertainty of future cash flows from any regulatory deferral account balances that are recognised.

[Link toparagraphs 27⁠–⁠36]

3

The requirements of this Standard permit an entity within its scope [Refer:paragraphs 5 and 6] to continue to account for regulatory deferral account balances in its financial statements in accordance with its previous GAAP when it adopts IFRS, subject to the limited changes referred to in paragraph 2 above.

[Refer:paragraphs 11, 12 and B3⁠–⁠B6]

4

In addition, this Standard provides some exceptions to, or exemptions from, the requirements of other Standards. All specified requirements for reporting regulatory deferral account balances, and any exceptions to, or exemptions from, the requirements of other Standards that are related to those balances, are contained within this Standard instead of within those other Standards.

[Refer:paragraphs 9⁠–⁠17 and B7⁠–⁠B28]

Scope

[Refer:Basis for Conclusions paragraphs BC25⁠–⁠BC27]

5

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; [Refer:paragraphs B1 and B2] and

(b)

recognised amounts that qualify as regulatory deferral account balances in its financial statements in accordance with its previous GAAP.

[Refer also:Basis for Conclusions paragraphs BC15⁠–⁠BC24, BC55⁠–⁠BC58 and BC65]

6

An entity shall apply the requirements of this Standard in its financial statements [Refer:IAS 1 paragraphs 10⁠–⁠11] for subsequent periods if and only if, in its first IFRS financial statements, it recognised regulatory deferral account balances by electing to apply the requirements of this Standard.

[Refer also:Basis for Conclusions paragraphs BC15⁠–⁠BC21, BC55⁠–⁠BC58 and BC65]

7

This Standard does not address other aspects of accounting by entities that are engaged in rate-regulated activities. By applying the requirements in this Standard, any amounts that are permitted or required to be recognised as assets or liabilities in accordance with other Standards shall not be included within the amounts classified as regulatory deferral account balances.

[Refer:Basis for Conclusions paragraphs BC19, BC21, BC26, BC27, BC37 and BC40⁠–⁠BC46]

8

An entity that is within the scope of, and that elects to apply, this Standard shall apply all of its requirements to all regulatory deferral account balances that arise from all of the entity’s rate-regulated activities.

Recognition, measurement, impairment and derecognition

Temporary exemption from paragraph 11 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

[Refer:Basis for Conclusions paragraphs BC28⁠–⁠BC32]

9

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.

10

Paragraphs 11⁠–⁠12 of IAS 8 specify sources of requirements and guidance that management is required or permitted to consider in developing an accounting policy for an item, if no relevant Standard applies specifically to that item. This Standard exempts an entity from applying paragraph 11 of IAS 8 to its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. Consequently, entities that recognise regulatory deferral account balances, either as separate items or as part of the carrying value of other assets and liabilities, in accordance with their previous GAAP, are permitted to continue to recognise those balances in accordance with this Standard through the exemption from paragraph 11 of IAS 8, subject to any presentation changes required by paragraphs 18⁠–⁠19 of this Standard.

Continuation of existing accounting policies

[Refer:

paragraphs B3⁠–⁠B6

Basis for Conclusions paragraphs BC39, BC59(b) and BC66]

11

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).

12

An entity shall apply the policies established in accordance with paragraph 11 consistently in subsequent periods, except for any changes permitted by paragraphs 13⁠–⁠15.

Changes in accounting policies

[Refer:Basis for Conclusions paragraphs BC33⁠–⁠BC36]

13

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.

[Link toparagraph B6]

14

This Standard does not exempt entities from applying paragraphs 10 or 14⁠–⁠15 of IAS 8 to changes in accounting policy. To justify changing its accounting policies for regulatory deferral account balances, an entity shall demonstrate that the change brings its financial statements closer to meeting the criteria in paragraph 10 of IAS 8. However, the change does not need to achieve full compliance with those criteria for the recognition, measurement, impairment and derecognition of regulatory deferral account balances.

15

Paragraphs 13⁠–⁠14 apply both to changes made on initial application of this Standard and to changes made in subsequent reporting periods.

Interaction with other Standards

[Refer: paragraphs B7⁠–⁠B28 Basis for Conclusions paragraphs BC37⁠–⁠BC39]

16

Any specific exception, exemption or additional requirements related to the interaction of this Standard with other Standards are contained within this Standard (see paragraphs B7⁠–⁠B28). In the absence of any such exception, exemption or additional requirements, other Standards shall apply to regulatory deferral account balances in the same way as they apply to assets, liabilities, income and expenses that are recognised in accordance with other Standards.

17

In some situations, another Standard might need to be applied to a regulatory deferral account balance that has been measured in accordance with an entity’s accounting policies that are established in accordance with paragraphs 11⁠–⁠12 in order to reflect that balance appropriately in the financial statements. For example, the entity might have rate-regulated activities in a foreign country for which the transactions and regulatory deferral account balances are denominated in a currency that is not the functional currency [Refer:IAS 21 paragraphs 8 (definition of functional currency) and 9⁠–⁠14] of the reporting entity. The regulatory deferral account balances and the movements in those balances are translated by applying IAS 21 The Effects of Changes in Foreign Exchange Rates.

Presentation

Disclosure of regulatory deferral accounts [text block] Disclosure text block IFRS 14 - Disclosure Disclosure 800500, 824500
[Refer:

Basis for Conclusions paragraphs BC19, BC21, BC36, BC40⁠–⁠BC46, BC68⁠–⁠BC71 and BC73⁠–⁠BC79

Illustrative Examples, example 1 paragraph IE1 and example 2]

Changes in presentation

18

This Standard introduces presentation requirements, outlined in paragraphs 20⁠–⁠26, for regulatory deferral account balances that are recognised in accordance with paragraphs 11⁠–⁠12. When this Standard is applied, the regulatory deferral account balances are recognised in the statement of financial position in addition to the assets and liabilities that are recognised in accordance with other Standards. These presentation requirements separate the impact of recognising regulatory deferral account balances from the financial reporting requirements of other Standards.

19

In addition to the items that are required to be presented in the statement of financial position and in the statement(s) of profit or loss and other comprehensive income in accordance with IAS 1 Presentation of Financial Statements, an entity applying this Standard shall present all regulatory deferral account balances and the movements in those balances in accordance with paragraphs 20⁠–⁠26.

Classification of regulatory deferral account balances

[Refer:

Illustrative Examples, example 1 Statement of financial position and example 2 Statement of financial position

Basis for Conclusions paragraph BC67]

20

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

Regulatory deferral account debit balances Disclosure Xinstant, debit IFRS 14.33 a Disclosure
IFRS 14.35 Disclosure 		824500

(b)

the total of all regulatory deferral account credit balances.

Regulatory deferral account credit balances Disclosure Xinstant, credit IFRS 14.33 a Disclosure
IFRS 14.35 Disclosure 		824500

21

When an entity presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, [Refer:IAS 1 paragraphs 60⁠–⁠76] 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.

[Refer:Basis for Conclusions paragraph BC47]
Assets and regulatory deferral account debit balances Disclosure Xinstant, debit 824500
Equity, liabilities and regulatory deferral account credit balances Disclosure Xinstant, credit 824500

Classification of movements in regulatory deferral account balances

22

An entity shall present, in the other comprehensive income section of the statement of profit or loss and other comprehensive income, the net movement in all regulatory deferral account balances for the reporting period that relate to items recognised in other comprehensive income. Separate line items shall be used for the net movement related to items that, in accordance with other Standards:

(a)

will not be reclassified subsequently to profit or loss; and

Income tax relating to net movement in regulatory deferral account balances related to items that will not be reclassified to profit or loss Disclosure Xduration, debit 824500
Other comprehensive income, before tax, net movement in regulatory deferral account balances related to items that will not be reclassified to profit or loss Disclosure Xduration, credit 824500
Other comprehensive income, net of tax, net movement in regulatory deferral account balances related to items that will not be reclassified to profit or loss Disclosure Xduration, credit IFRS 14.35 Disclosure 824500

(b)

will be reclassified subsequently to profit or loss when specific conditions are met.

Gains (losses) on net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss, before tax Disclosure Xduration, credit 824500
Gains (losses) on net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss, net of tax Disclosure Xduration, credit 824500
Income tax relating to net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss Disclosure Xduration, debit 824500
Other comprehensive income, before tax, net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss Disclosure Xduration, credit 824500
Other comprehensive income, net of tax, net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss Disclosure Xduration, credit IFRS 14.35 Disclosure 824500
Reclassification adjustments on net movement in regulatory deferral account balances, before tax Disclosure Xduration, debit 824500
Reclassification adjustments on net movement in regulatory deferral account balances, net of tax Disclosure Xduration, debit 824500
[Refer: 

Basis for Conclusions paragraphs BC59(c) and BC67

Illustrative Examples, example 1 Statement of profit or loss and other comprehensive income and example 2 Statement of profit or loss and other comprehensive income]

[Link to IAS 1 paragraph 82A]

23

An entity shall present a separate line item in the profit or loss section of the statement of profit or loss and other comprehensive income, or in the separate statement of profit or loss, for the remaining net movement in all regulatory deferral account balances for the reporting period, excluding movements that are not reflected in profit or loss, such as amounts acquired. [Refer:Basis for Conclusions paragraph BC44] This separate line item shall be distinguished from the income and expenses that are presented in accordance with other Standards by the use of a sub-total, which is drawn before the net movement in regulatory deferral account balances.

[Refer: 

Basis for Conclusions paragraph BC59(c) and BC67

Illustrative Examples, example 1 Statement of profit or loss and other comprehensive income and example 2 Statement of profit or loss and other comprehensive income]

Net movement in regulatory deferral account balances related to profit or loss Disclosure Xduration, credit IFRS 14.35 Disclosure 824500
Profit (loss), including net movement in regulatory deferral account balances related to profit or loss and net movement in related deferred tax Disclosure Xduration, credit 824500
Profit (loss), including net movement in regulatory deferral account balances related to profit or loss and net movement in related deferred tax, attributable to non-controlling interests Example Xduration, credit IFRS 14.IE1 Example 824500
Profit (loss), including net movement in regulatory deferral account balances related to profit or loss and net movement in related deferred tax, attributable to owners of parent Example Xduration, credit IFRS 14.IE1 Example 824500

24

When an entity recognises a deferred tax asset or a deferred tax liability as a result of recognising regulatory deferral account balances, the entity shall present the resulting deferred tax asset (liability) and the related movement in that deferred tax asset (liability) with the related regulatory deferral account balances and movements in those balances, instead of within the total presented in accordance with IAS 12 Income Taxes for deferred tax assets (liabilities) and the tax expense (income) (see paragraphs B9⁠–⁠B12).

[Refer:Illustrative Examples, example 1 and example 2]
Deferred tax asset associated with regulatory deferral account balances Disclosure Xinstant, debit IFRS 14.B11 b Disclosure 824500
Deferred tax liability associated with regulatory deferral account balances Disclosure Xinstant, credit IFRS 14.B11 b Disclosure 824500
Net movement in deferred tax arising from regulatory deferral account balances related to profit or loss Disclosure Xduration, credit IFRS 14.B12 b Disclosure 824500
Net movement in regulatory deferral account balances related to profit or loss and net movement in related deferred tax Disclosure Xduration, credit IFRS 14.B12 a Disclosure 824500
Regulatory deferral account credit balances and related deferred tax liability Disclosure Xinstant, credit IFRS 14.B11 a Disclosure 824500
Regulatory deferral account debit balances and related deferred tax asset Disclosure Xinstant, debit IFRS 14.B11 a Disclosure 824500

25

When an entity presents a discontinued operation or a disposal group in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the entity shall present any related regulatory deferral account balances and the net movement in those balances, as applicable, with the regulatory deferral account balances and movements in those balances, instead of within the disposal groups or discontinued operations (see paragraphs B19⁠–⁠B22).

[Refer:Illustrative Examples, example 2]
Net movement in other regulatory deferral account balances related to profit or loss Common practice Xduration, credit IFRS 14.IE5 Common practice 824500
Other regulatory deferral account credit balances Example Xinstant, credit IFRS 14.IE5 Example 824500
Other regulatory deferral account debit balances Example Xinstant, debit IFRS 14.IE5 Example 824500
Net movement in regulatory deferral account balances related to profit or loss directly associated with discontinued operation Disclosure Xduration, credit 824500
Regulatory deferral account credit balances directly related to disposal group Disclosure Xinstant, credit 824500
Regulatory deferral account debit balances directly related to disposal group Disclosure Xinstant, debit 824500

26

When an entity presents earnings per share in accordance with IAS 33 Earnings per Share, the entity shall present additional basic and diluted earnings per share, which are calculated using the earnings amounts required by IAS 33 but excluding the movements in regulatory deferral account balances (see paragraphs B13⁠–⁠B14).

[Refer:Illustrative Examples, example 1 Statement of profit or loss and other comprehensive income]
Basic earnings (loss) per share from continuing operations, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500
Basic earnings (loss) per share from discontinued operations, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500
Basic earnings (loss) per share, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500
Diluted earnings (loss) per share from continuing operations, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500
Diluted earnings (loss) per share from discontinued operations, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500
Diluted earnings (loss) per share, including net movement in regulatory deferral account balances and net movement in related deferred tax Disclosure X.XX IAS 33.67 Disclosure 824500

Disclosure

Disclosure of regulatory deferral accounts [text block] Disclosure text block IFRS 14 - Presentation Disclosure 800500, 824500
[Refer:Basis for Conclusions paragraphs BC19, BC21, BC68⁠–⁠BC72 and BC79]

Objective

27

An entity that elects to apply this Standard shall disclose information that enables users [Refer:Conceptual Framework paragraphs 1.2⁠–⁠1.10 and 2.36] 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.

[Refer:Basis for Conclusions paragraphs BC48 and BC49]

28

If any of the disclosures set out in paragraphs 30⁠–⁠36 are not considered relevant to meet the objective in paragraph 27, they may be omitted from the financial statements. If the disclosures provided in accordance with paragraphs 30⁠–⁠36 are insufficient to meet the objective in paragraph 27, an entity shall disclose additional information that is necessary to meet that objective.

[Refer:Basis for Conclusions paragraphs BC49 and BC59(d)]

29

To meet the disclosure objective in paragraph 27, an entity shall consider all of the following:

(a)

the level of detail that is necessary to satisfy the disclosure requirements;

(b)

how much emphasis to place on each of the various requirements;

(c)

how much aggregation or disaggregation to undertake; and

(d)

whether users [Refer:Conceptual Framework paragraphs 1.2⁠–⁠1.10 and 2.36] of financial statements need additional information to evaluate the quantitative information disclosed.

[Refer:Basis for Conclusions paragraphs BC49 and BC59(d)]

Explanation of activities subject to rate regulation

Disclosure of information about activities subject to rate regulation [table] Disclosure table 824500
Disclosure of information about activities subject to rate regulation [text block] Disclosure text block 824500
[Refer:Basis for Conclusions paragraph BC35]

30

To help a user [Refer:Conceptual Framework paragraphs 1.2⁠–⁠1.10 and 2.36] of the financial statements assess the nature of, and the risks associated with, the entity’s rate-regulated activities, an entity shall, for each type of rate-regulated activity, disclose:

(a)

a brief description of the nature and extent of the rate-regulated activity and the nature of the regulatory rate-setting process;

Description of nature and extent of rate-regulated activity Disclosure text 824500
Description of nature of regulatory rate-setting process Disclosure text 824500

(b)

the identity of the rate regulator(s). If the rate regulator is a related party (as defined in IAS 24 Related Party Disclosures), the entity shall disclose that fact, together with an explanation of how it is related;

Description of identity of rate regulator(s) Disclosure text 824500
Explanation of how rate regulator is related Disclosure text 824500
Statement that rate regulator is related party Disclosure text 824500

(c)

how the future recovery of each class (ie each type of cost or income) of regulatory deferral account debit balance or reversal of each class of regulatory deferral account credit balance is affected by risks and uncertainty, for example:

(i)

demand risk (for example, changes in consumer attitudes, the availability of alternative sources of supply or the level of competition);

(ii)

regulatory risk (for example, the submission or approval of a rate-setting application or the entity’s assessment of the expected future regulatory actions); and

(iii)

other risks (for example, currency or other market risks).

Classes of regulatory deferral account balances [axis] Disclosure axis IFRS 14.33 Disclosure 824500, 990000
Classes of regulatory deferral account balances [member] Disclosure member IFRS 14.33 Disclosure 824500, 990000
Description of how future recovery or reversal of regulatory deferral account balances is affected by risks and uncertainty Disclosure text 824500
[Refer:Basis for Conclusions paragraph BC50]
Rate-regulated activities [member] Disclosure member IFRS 14.33 Disclosure 824500, 990000
Types of rate-regulated activities [axis] Disclosure axis IFRS 14.33 Disclosure 824500, 990000

31

The disclosures required by paragraph 30 shall be given in the financial statements [Refer:IAS 1 paragraphs 10⁠–⁠11] either directly in the notes or incorporated by cross-reference from the financial statements to some other statement, such as a management commentary or risk report, that is available to users of the financial statements on the same terms as the financial statements and at the same time. If the information is not included in the financial statements directly or incorporated by cross-reference, the financial statements are incomplete.

[Refer:Basis for Conclusions paragraph BC52]
Description of cross-reference to disclosures about activities subject to rate regulation Disclosure text 824500

Explanation of recognised amounts

Disclosure of information about amounts recognised in relation to regulatory deferral account balances [table] Disclosure table 824500
Disclosure of information about amounts recognised in relation to regulatory deferral account balances [text block] Disclosure text block 824500
[Refer:Basis for Conclusions paragraph BC50]

32

An entity shall disclose the basis on which regulatory deferral account balances are recognised and derecognised, and how they are measured initially and subsequently, including how regulatory deferral account balances are assessed for recoverability and how any impairment loss is allocated. [Refer:paragraphs B15 and B16]

Description of basis on which regulatory deferral account balances are recognised and derecognised, and how they are measured initially and subsequently Disclosure text 824500

33

For each type of rate-regulated activity, an entity shall disclose the following information for each class of regulatory deferral account balance:

(a)

a reconciliation of the carrying amount at the beginning and the end of the period, in a table unless another format is more appropriate. [Refer:Basis for Conclusions paragraphs BC44 and BC51] The entity shall apply judgement in deciding the level of detail necessary (see paragraphs 28⁠–⁠29), but the following components would usually be relevant:

(i)

the amounts that have been recognised in the current period in the statement of financial position as regulatory deferral account balances;

Increase (decrease) through balances recognised in current period in statement of financial position, regulatory deferral account credit balances Example Xduration, credit 824500
Increase (decrease) through balances recognised in current period in statement of financial position, regulatory deferral account debit balances Example Xduration, debit 824500

(ii)

the amounts that have been recognised in the statement(s) of profit or loss and other comprehensive income relating to balances that have been recovered (sometimes described as amortised) or reversed in the current period; and

Decrease through balances recovered in current period, regulatory deferral account debit balances Example Xduration, credit 824500
Decrease through balances reversed in current period, regulatory deferral account credit balances Example Xduration, debit 824500

(iii)

other amounts, separately identified, that affected the regulatory deferral account balances, such as impairments, items acquired or assumed in a business combination, items disposed of, or the effects of changes in foreign exchange rates or discount rates;

Decrease through disposals, regulatory deferral account credit balances Example Xduration, debit 824500
Decrease through disposals, regulatory deferral account debit balances Example Xduration, credit 824500
Decrease through impairments, regulatory deferral account debit balances Example Xduration, credit 824500
Increase (decrease) through changes in discount rates, regulatory deferral account credit balances Example Xduration, credit 824500
Increase (decrease) through changes in discount rates, regulatory deferral account debit balances Example Xduration, debit 824500
Increase (decrease) through changes in foreign exchange rates, regulatory deferral account credit balances Example Xduration, credit 824500
Increase (decrease) through changes in foreign exchange rates, regulatory deferral account debit balances Example Xduration, debit 824500
Increase (decrease) through other changes, regulatory deferral account credit balances Example Xduration, credit 824500
Increase (decrease) through other changes, regulatory deferral account debit balances Example Xduration, debit 824500
Increase (decrease) through transfers to disposal groups, regulatory deferral account credit balances Example Xduration, credit IFRS 14.IE5 Example 824500
Increase (decrease) through transfers to disposal groups, regulatory deferral account debit balances Example Xduration, debit IFRS 14.IE5 Example 824500
Increase through items acquired in business combination, regulatory deferral account debit balances Example Xduration, debit 824500
Increase through items assumed in business combination, regulatory deferral account credit balances Example Xduration, credit 824500
[Refer:Illustrative Examples, example 1 paragraph IE2 and example 2]
Increase (decrease) in regulatory deferral account credit balances Disclosure Xduration, credit 824500
Increase (decrease) in regulatory deferral account debit balances Disclosure Xduration, debit 824500
Regulatory deferral account credit balances Disclosure Xinstant, credit IFRS 14.20 b Disclosure
IFRS 14.35 Disclosure 		824500
Regulatory deferral account debit balances Disclosure Xinstant, debit IFRS 14.20 a Disclosure
IFRS 14.35 Disclosure 		824500

(b)

the rate of return or discount rate (including a zero rate or a range of rates, when applicable) used to reflect the time value of money that is applicable to each class of regulatory deferral account balance; and

Bottom of range [member] Disclosure member IFRS 13.B6 Example
IFRS 13.IE63 Example
Effective 2023-01-01 IFRS 17.120 Disclosure
IFRS 2.45 d Disclosure
IFRS 7.7 Common practice 		822390, 823000, 824500, 834120, 836600
Discount rate used to reflect time value of money, regulatory deferral account balances Disclosure X.XX 824500
Range [axis] Disclosure axis IFRS 13.B6 Example
IFRS 13.IE63 Example
Effective 2023-01-01 IFRS 17.120 Disclosure
IFRS 2.45 d Disclosure
IFRS 7.7 Common practice 		822390, 823000, 824500, 834120, 836600, 990000
Ranges [member] Disclosure member IFRS 13.B6 Example
IFRS 13.IE63 Example
Effective 2023-01-01 IFRS 17.120 Disclosure
IFRS 2.45 d Disclosure
IFRS 7.7 Common practice 		822390, 823000, 824500, 834120, 836600, 990000
Rate of return used to reflect time value of money, regulatory deferral account balances Disclosure X.XX 824500
Top of range [member] Disclosure member IFRS 13.B6 Example
IFRS 13.IE63 Example
Effective 2023-01-01 IFRS 17.120 Disclosure
IFRS 2.45 d Disclosure
IFRS 7.7 Common practice 		822390, 823000, 824500, 834120, 836600
Weighted average [member] Disclosure member IFRS 13.B6 Example
IFRS 13.IE63 Example
Effective 2023-01-01 IFRS 17.120 Disclosure
IFRS 7.7 Common practice 		822390, 823000, 824500, 836600

(c)

the remaining periods over which the entity expects to recover (or amortise) the carrying amount of each class of regulatory deferral account debit balance or to reverse each class of regulatory deferral account credit balance.

Remaining recovery period of regulatory deferral account debit balances Disclosure DUR 824500
Remaining reversal period of regulatory deferral account credit balances Disclosure DUR 824500
Electricity distribution [member] Example member IFRS 14.IE2 Example 824500
Gas distribution [member] Example member IFRS 14.IE2 Example 824500
Classes of regulatory deferral account balances [axis] Disclosure axis IFRS 14.30 c Disclosure 824500, 990000
Classes of regulatory deferral account balances [member] Disclosure member IFRS 14.30 c Disclosure 824500, 990000
Rate-regulated activities [member] Disclosure member IFRS 14.30 Disclosure 824500, 990000
Types of rate-regulated activities [axis] Disclosure axis IFRS 14.30 Disclosure 824500, 990000

34

When rate regulation affects the amount and timing of an entity’s income tax expense (income), the entity shall disclose the impact of the rate regulation on the amounts of current and deferred tax recognised. [Refer:IAS 12] In addition, the entity shall separately disclose any regulatory deferral account balance that relates to taxation and the related movement in that balance.

Description of impact of rate regulation on current and deferred tax Disclosure text 824500
Increase (decrease) in current tax expense (income) due to rate regulation Disclosure Xduration, debit 824500
Increase (decrease) in deferred tax expense (income) due to rate regulation Disclosure Xduration, debit 824500
Taxation-related regulatory deferral account balances [member] Disclosure member 824500

35

When an entity provides disclosures in accordance with IFRS 12 Disclosure of Interests in Other Entities for an interest in a subsidiary, associate or joint venture that has rate-regulated activities and for which regulatory deferral account balances are recognised in accordance with this Standard, the entity shall disclose the amounts that are included for the regulatory deferral account debit and credit balances and the net movement in those balances for the interests disclosed (see paragraphs B25⁠–⁠B28).

Net movement in regulatory deferral account balances related to profit or loss Disclosure Xduration, credit IFRS 14.23 Disclosure 824500
Other comprehensive income, net of tax, net movement in regulatory deferral account balances related to items that will be reclassified to profit or loss Disclosure Xduration, credit IFRS 14.22 b Disclosure 824500
Other comprehensive income, net of tax, net movement in regulatory deferral account balances related to items that will not be reclassified to profit or loss Disclosure Xduration, credit IFRS 14.22 a Disclosure 824500
Regulatory deferral account credit balances Disclosure Xinstant, credit IFRS 14.20 b Disclosure
IFRS 14.33 a Disclosure 		824500
Regulatory deferral account debit balances Disclosure Xinstant, debit IFRS 14.20 a Disclosure
IFRS 14.33 a Disclosure 		824500

36

When an entity concludes that a regulatory deferral account balance is no longer fully recoverable or reversible, it shall disclose that fact, the reason why it is not recoverable or reversible and the amount by which the regulatory deferral account balance has been reduced.

Amount by which regulatory deferral account credit balance has been reduced because it is no longer fully reversible Disclosure Xinstant, debit 824500
Amount by which regulatory deferral account debit balance has been reduced because it is no longer fully recoverable Disclosure Xinstant, credit 824500
Description of reason why regulatory deferral account balance is no longer fully recoverable or reversible Disclosure text 824500
Statement that regulatory deferral account balance is no longer fully recoverable or reversible Disclosure text 824500

Appendices

Appendix ADefined terms

This appendix is an integral part of the Standard.

first IFRS financial statements

The first annual financial statements in which an entity adopts International Financial Reporting Standards (IFRS), by an explicit and unreserved statement of compliance with IFRS. [Refer:IFRS 1 paragraphs 3⁠–⁠4A]

first-time adopter

An entity that presents its first IFRS financial statements.

previous GAAP

The basis of accounting that a first-time adopter used immediately before adopting IFRS.

rate-regulated activities

An entity’s activities that are subject to rate regulation. [Refer:paragraphs B1 and B2]

rate regulation

A framework for establishing the prices that can be charged to customers for goods or services and that framework is subject to oversight and/or approval by a rate regulator. [Refer:Basis for Conclusions paragraphs BC22⁠–⁠BC24 and BC55⁠–⁠BC57]

rate regulator

An authorised body that is empowered by statute or regulation to establish the rate or a range of rates that bind an entity. The rate regulator may be a third-party body or a related party of the entity, including the entity’s own governing board, if that body is required by statute or regulation to set rates both in the interest of the customers and to ensure the overall financial viability of the entity. [Refer:Basis for Conclusions paragraphs BC22⁠–⁠BC24 and BC55⁠–⁠BC57]

regulatory deferral account balance

The balance of any expense (or income) account that would not be recognised as an asset or a liability in accordance with other Standards, but that qualifies for deferral because it is included, or is expected to be included, by the rate regulator in establishing the rate(s) that can be charged to customers.

[Refer:

paragraphs B3⁠–⁠B6

Basis for Conclusions paragraphs BC2, BC11, BC12 and BC21]

Appendix BApplication Guidance

This appendix is an integral part of the Standard.

Rate-regulated activities

B1

Historically, rate regulation applied to all activities of an entity. However, with acquisitions, diversification and deregulation, rate regulation may now apply to only a portion of an entity’s activities, resulting in it having both regulated and non-regulated activities. This Standard applies only to the rate-regulated activities that are subject to statutory or regulatory restrictions through the actions of a rate regulator, regardless of the type of entity or the industry to which it belongs.

[Refer:Basis for Conclusions paragraph BC22]

B2

An entity shall not apply this Standard to activities that are self-regulated, ie activities that are not subject to a pricing framework that is overseen and/or approved by a rate regulator. This does not prevent the entity from being eligible to apply this Standard when:

(a)

the entity’s own governing body or a related party establishes rates both in the interest of the customers and to ensure the overall financial viability of the entity within a specified pricing framework; and

(b)

the framework is subject to oversight and/or approval by an authorised body that is empowered by statute or regulation.

[Refer:Basis for Conclusions paragraphs BC22⁠–⁠BC24]

Continuation of existing accounting policies

[Refer:paragraphs 11 and 12]

B3

For the purposes of this Standard, a regulatory deferral account balance is defined as the balance of any expense (or income) account that would not be recognised as an asset or a liability in accordance with other Standards, but that qualifies for deferral because it is included, or is expected to be included, by the rate regulator in establishing the rate(s) that can be charged to customers. Some items of expense (income) may be outside the regulated rate(s) because, for example, the amounts are not expected to be accepted by the rate regulator or because they are not within the scope of the rate regulation. Consequently, such an item is recognised as income or expense as incurred, unless another Standard permits or requires it to be included in the carrying amount of an asset or liability.

B4

In some cases, other Standards explicitly prohibit an entity from recognising, in the statement of financial position, regulatory deferral account balances that might be recognised, either separately or included within other line items such as property, plant and equipment in accordance with previous GAAP accounting policies. However, in accordance with paragraph 11 of this Standard, an entity that elects to apply this Standard in its first IFRS financial statements applies the exemption from paragraph 11 of IAS 8 in order to continue to apply its previous GAAP accounting policies for the recognition, measurement, impairment, and derecognition of regulatory deferral account balances. Such accounting policies may include, for example, the following practices:

(a)

recognising a regulatory deferral account debit balance when the entity has the right, as a result of the actual or expected actions of the rate regulator, to increase rates in future periods in order to recover its allowable costs (ie the costs for which the regulated rate(s) is intended to provide recovery);

(b)

recognising, as a regulatory deferral account debit or credit balance, an amount that is equivalent to any loss or gain on the disposal or retirement of both items of property, plant and equipment and of intangible assets, which is expected to be recovered or reversed through future rates;

(c)

recognising a regulatory deferral account credit balance when the entity is required, as a result of the actual or expected actions of the rate regulator, to decrease rates in future periods in order to reverse over-recoveries of allowable costs (ie amounts in excess of the recoverable amount specified by the rate regulator); and

(d)

measuring regulatory deferral account balances on an undiscounted basis or on a discounted basis that uses an interest or discount rate specified by the rate regulator.

B5

The following are examples of the types of costs that rate regulators might allow in rate-setting decisions and that an entity might, therefore, recognise in regulatory deferral account balances:

(i)

volume or purchase price variances;

(ii)

costs of approved ‘green energy’ initiatives (in excess of amounts that are capitalised as part of the cost of property, plant and equipment in accordance with IAS 16 Property, Plant and Equipment);

(iii)

non-directly-attributable overhead costs that are treated as capital costs for rate regulation purposes (but are not permitted, in accordance with IAS 16, to be included in the cost of an item of property, plant and equipment);

(iv)

project cancellation costs;

(v)

storm damage costs; and

(vi)

deemed interest (including amounts allowed for funds that are used during construction that provide the entity with a return on the owner’s equity capital as well as borrowings).

B6

Regulatory deferral account balances usually represent timing differences between the recognition of items of income or expenses for regulatory purposes and the recognition of those items for financial reporting purposes. When an entity changes an accounting policy on the first-time adoption of IFRS or on the initial application of a new or revised Standard, new or revised timing differences may arise that create new or revised regulatory deferral account balances. The prohibition in paragraph 13 that prevents an entity from changing its accounting policy in order to start to recognise regulatory deferral account balances does not prohibit the recognition of the new or revised regulatory deferral account balances that are created because of other changes in accounting policies required by IFRS. This is because the recognition of regulatory deferral account balances for such timing differences would be consistent with the existing recognition policy applied in accordance with paragraph 11 and would not represent the introduction of a new accounting policy. Similarly, paragraph 13 does not prohibit the recognition of regulatory deferral account balances arising from timing differences that did not exist immediately prior to the date of transition to IFRS but are consistent with the entity’s accounting policies established in accordance with paragraph 11 (for example, storm damage costs). [Refer:Basis for Conclusions paragraph BC59(a)(iii)]

Applicability of other Standards

[Refer:Basis for Conclusions paragraphs BC37 and BC38]

B7

An entity that is within the scope of, and that elects to apply, the requirements of this Standard shall continue to apply its previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. However, paragraphs 16⁠–⁠17 state that, in some situations, other Standards might also need to be applied to regulatory deferral account balances in order to reflect them appropriately in the financial statements. The following paragraphs outline how some other Standards interact with the requirements of this Standard. In particular, the following paragraphs clarify specific exceptions to, and exemptions from, other Standards and additional presentation and disclosure requirements that are expected to be applicable.

Application of IAS 10 Events after the Reporting Period

B8

An entity may need to use estimates and assumptions in the recognition and measurement of its regulatory deferral account balances. For events that occur between the end of the reporting period and the date when the financial statements are authorised for issue, [Refer:IAS 10 paragraphs 4⁠–⁠7] the entity shall apply IAS 10 to identify whether those estimates and assumptions should be adjusted to reflect those events.

[Refer:IAS 10 paragraphs 8⁠–⁠11]

Application of IAS 12 Income Taxes

B9

IAS 12 requires, with certain limited exceptions, an entity to recognise a deferred tax liability and (subject to certain conditions) a deferred tax asset for all temporary differences. [Refer:IAS 12 paragraphs 15⁠–⁠44] A rate-regulated entity shall apply IAS 12 to all of its activities, including its rate-regulated activities, to identify the amount of income tax that is to be recognised.

B10

In some rate-regulatory schemes, the rate regulator permits or requires an entity to increase its future rates in order to recover some or all of the entity’s income tax expense. In such circumstances, this might result in the entity recognising a regulatory deferral account balance in the statement of financial position related to income tax, in accordance with its accounting policies established in accordance with paragraphs 11⁠–⁠12. The recognition of this regulatory deferral account balance that relates to income tax might itself create an additional temporary difference [Refer:IAS 12 paragraph 5 (definition of temporary differences)] for which a further deferred tax amount would be recognised.

B11

Notwithstanding the presentation and disclosure requirements of IAS 12, when an entity recognises a deferred tax asset or a deferred tax liability as a result of recognising regulatory deferral account balances, the entity shall not include that deferred tax amount within the total deferred tax asset (liability) balances. Instead, the entity shall present the deferred tax asset (liability) that arises as a result of recognising regulatory deferral account balances either:

(a)

with the line items that are presented for the regulatory deferral account debit balances and credit balances; [Refer:Illustrative Examples, example 1 Statement of financial position] or

Regulatory deferral account credit balances and related deferred tax liability Disclosure Xinstant, credit IFRS 14.24 Disclosure 824500
Regulatory deferral account debit balances and related deferred tax asset Disclosure Xinstant, debit IFRS 14.24 Disclosure 824500

(b)

as a separate line item alongside the related regulatory deferral account debit balances and credit balances. [Refer:Illustrative Examples, example 2 Statement of financial position]

Deferred tax asset associated with regulatory deferral account balances Disclosure Xinstant, debit IFRS 14.24 Disclosure 824500
Deferred tax liability associated with regulatory deferral account balances Disclosure Xinstant, credit IFRS 14.24 Disclosure 824500
[Refer also:paragraphs 22 and 24]

B12

Similarly, when an entity recognises the movement in a deferred tax asset (liability) that arises as a result of recognising regulatory deferral account balances, the entity shall not include the movement in that deferred tax amount within the tax expense (income) line item that is presented in the statement(s) of profit or loss and other comprehensive income in accordance with IAS 12. Instead, the entity shall present the movement in the deferred tax asset (liability) that arises as a result of recognising regulatory deferral account balances either:

(a)

with the line items that are presented in the statement(s) of profit or loss and other comprehensive income for the movements in regulatory deferral account balances; [Refer:Illustrative Examples, example 1 Statement of profit or loss and other comprehensive income] or

Net movement in regulatory deferral account balances related to profit or loss and net movement in related deferred tax Disclosure Xduration, credit IFRS 14.24 Disclosure 824500

(b)

as a separate line item alongside the related line items that are presented in the statement(s) of profit or loss and other comprehensive income for the movements in regulatory deferral account balances. [Refer:Illustrative Examples, example 2 Statement of profit or loss and other comprehensive income]

Net movement in deferred tax arising from regulatory deferral account balances related to profit or loss Disclosure Xduration, credit IFRS 14.24 Disclosure 824500
[Refer also:paragraphs 23 and 24]

Application of IAS 33 Earnings per Share

B13

Paragraph 66 of IAS 33 requires some entities to present, in the statement of profit or loss and other comprehensive income, basic and diluted earnings per share both for profit or loss from continuing operations and profit or loss that is attributable to the ordinary equity holders of the parent entity. In addition, paragraph 68 of IAS 33 requires an entity that reports a discontinued operation to disclose the basic and diluted amounts per share for the discontinued operation, either in the statement of profit or loss and other comprehensive income or in the notes.

B14

For each earnings per share amount presented in accordance with IAS 33, an entity applying this Standard shall present additional basic and diluted earnings per share amounts that are calculated in the same way, except that those amounts shall exclude the net movement in the regulatory deferral account balances. Consistent with the requirement in paragraph 73 of IAS 33, an entity shall present the earnings per share required by paragraph 26 of this Standard with equal prominence to the earnings per share required by IAS 33 for all periods presented.

[Refer: 

paragraph 26

Illustrative Examples, example 1 Statement of profit or loss and other comprehensive income]

Application of IAS 36 Impairment of Assets

B15

Paragraphs 11⁠–⁠12 require an entity to continue to apply its previous GAAP accounting policies for the identification, recognition, measurement and reversal of any impairment of its recognised regulatory deferral account balances. Consequently, IAS 36 does not apply to the separate regulatory deferral account balances recognised.

[Refer:Basis for Conclusions paragraph BC39]

B16

However, IAS 36 might require an entity to perform an impairment test on a cash-generating unit (CGU) [Refer:IAS 36 paragraph 6 (definition of cash-generating unit)] that includes regulatory deferral account balances. This test might be required because the CGU contains goodwill, [Refer:IAS 36 paragraph 10(b)] or because one or more of the impairment indicators described in IAS 36 [Refer:IAS 36 paragraphs 8, 9 and 12⁠–⁠14] have been identified relating to the CGU. In such situations, paragraphs 74⁠–⁠79 of IAS 36 contain requirements for identifying the recoverable amount and the carrying amount of a CGU. An entity shall apply those requirements to decide whether any of the regulatory deferral account balances recognised are included in the carrying amount of the CGU for the purpose of the impairment test. The remaining requirements of IAS 36 shall then be applied to any impairment loss that is recognised as a result of this test.

Application of IFRS 3 Business Combinations

[Refer:Basis for Conclusions paragraph BC59(a)(ii)]

B17

The core principle of IFRS 3 is that an acquirer of a business [Refer:IFRS 3 Appendix A (definitions of acquirer and business) and, for business, paragraphs B7⁠–⁠B12] recognises the assets acquired and the liabilities assumed at their acquisition-date fair values. IFRS 3 provides limited exceptions to its recognition and measurement principles. Paragraph B18 of this Standard provides an additional exception.

B18

Paragraphs 11⁠–⁠12 require an entity to continue to apply its previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. Consequently, if an entity acquires a business [Refer:IFRS 3 Appendix A (definition of a business) and paragraphs B7⁠–⁠B12], it shall apply, in its consolidated financial statements, its accounting policies established in accordance with paragraphs 11⁠–⁠12 for the recognition and measurement of the acquiree’s regulatory deferral account balances at the date of acquisition. [Refer:IFRS 3 Appendix A (definition of acquisition date)] The acquiree’s regulatory deferral account balances shall be recognised in the consolidated financial statements of the acquirer in accordance with the acquirer’s policies, irrespective of whether the acquiree recognises those balances in its own financial statements.

Application of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

[Refer:paragraph 25]

B19

Paragraphs 11⁠–⁠12 require an entity to continue to apply its previous accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. Consequently, the measurement requirements of IFRS 5 [Refer:IFRS 5 paragraphs 15⁠–⁠29] shall not apply to the regulatory deferral account balances recognised.

B20

Paragraph 33 of IFRS 5 requires a single amount to be presented for discontinued operations [Refer:IFRS 5 Appendix A (definition of discontinued operation)] in the statement(s) of profit or loss and other comprehensive income. Notwithstanding the requirements of that paragraph, when an entity that elects to apply this Standard presents a discontinued operation, it shall not include the movement in regulatory deferral account balances that arose from the rate-regulated activities of the discontinued operation within the line items that are required by paragraph 33 of IFRS 5. Instead, the entity shall present the movement in regulatory deferral account balances that arose from the rate-regulated activities of the discontinued operation either:

(a)

within the line item that is presented for movements in the regulatory deferral account balances related to profit or loss; or

(b)

as a separate line item alongside the related line item that is presented for movements in the regulatory deferral account balances related to profit or loss.

B21

Similarly, notwithstanding the requirements of paragraph 38 of IFRS 5, when an entity presents a disposal group, [Refer:IFRS 5 Appendix A (definition of disposal group)] the entity shall not include the total of the regulatory deferral account debit balances and credit balances that are part of the disposal group within the line items that are required by paragraph 38 of IFRS 5. Instead, the entity shall present the total of the regulatory deferral account debit balances and credit balances that are part of the disposal group either:

(a)

within the line items that are presented for the regulatory deferral account debit balances and credit balances; or

(b)

as separate line items alongside the other regulatory deferral account debit balances and credit balances.

B22

If the entity chooses to include the regulatory deferral account balances and movements in those balances that are related to the disposal group or discontinued operation within the related regulated deferral account line items, it may be necessary to disclose them separately as part of the analysis of the regulatory deferral account line items described by paragraph 33 of this Standard.

Regulatory deferral account balances [axis] Disclosure axis 824500, 990000
Regulatory deferral account balances [member] Disclosure member 824500, 990000
Regulatory deferral account balances classified as disposal groups [member] Disclosure member 824500
Regulatory deferral account balances not classified as disposal groups [member] Disclosure member 824500

Application of IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures

[Refer:Basis for Conclusions paragraph BC59(a)(i)]

B23

Paragraph 19 of IFRS 10 requires that a “parent shall prepare consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances”. Paragraph 8 of this Standard requires that an entity that is within the scope of, and elects to apply, this Standard shall apply all of its requirements to all regulatory deferral account balances arising from all of the entity’s rate-regulated activities. Consequently, if a parent recognises regulatory deferral account balances in its consolidated financial statements in accordance with this Standard, it shall apply the same accounting policies to the regulatory deferral account balances arising in all of its subsidiaries. This shall apply irrespective of whether the subsidiaries recognise those balances in their own financial statements.

B24

Similarly, paragraphs 35⁠–⁠36 of IAS 28 require that, in applying the equity method, an “entity’s financial statements shall be prepared using uniform accounting policies for like transactions and events in similar circumstances”. Consequently, adjustments shall be made to make the associate’s or joint venture’s accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances conform to those of the investing entity in applying the equity method.

Application of IFRS 12 Disclosure of Interests in Other Entities

B25

Paragraph 12(e) of IFRS 12 requires an entity to disclose, for each of its subsidiaries that have non-controlling interests that are material to the reporting entity, the profit or loss that was allocated to non-controlling interests of the subsidiary during the reporting period. An entity that recognises regulatory deferral account balances in accordance with this Standard shall disclose the net movement in regulatory deferral account balances that is included within the amounts that are required to be disclosed by paragraph 12(e) of IFRS 12.

Net movement in regulatory deferral account balances related to profit or loss, attributable to non-controlling interests Disclosure Xduration, credit 824500

B26

Paragraph 12(g) of IFRS 12 requires an entity to disclose, for each of its subsidiaries that have non-controlling interests that are material to the reporting entity, summarised financial information about the subsidiary, as specified in paragraph B10 of IFRS 12. Similarly, paragraph 21(b)(ii) of IFRS 12 requires an entity to disclose, for each joint venture and associate that is material to the reporting entity, summarised financial information as specified in paragraphs B12⁠–⁠B13 of IFRS 12. Paragraph B16 of IFRS 12 specifies the summary financial information that an entity is required to disclose for all other associates and joint ventures that are not individually material in accordance with paragraph 21(c) of IFRS 12.

B27

In addition to the information specified in paragraphs 12, 21, B10, B12⁠–⁠B13 and B16 of IFRS 12, an entity that recognises regulatory deferral account balances in accordance with this Standard shall also disclose the total regulatory deferral account debit balance, the total regulatory deferral account credit balance and the net movements in those balances, split between amounts recognised in profit or loss and amounts recognised in other comprehensive income, for each entity for which those IFRS 12 disclosures are required.

B28

Paragraph 19 of IFRS 12 specifies the information that an entity is required to disclose when the entity recognises a gain or loss on losing control of a subsidiary calculated in accordance with paragraph 25 of IFRS 10. In addition to the information required by paragraph 19 of IFRS 12, an entity that elects to apply this Standard shall disclose the portion of that gain or loss that is attributable to derecognising regulatory deferral account balances in the former subsidiary at the date when control is lost.

Portion of gains (losses) recognised when control of subsidiary is lost, attributable to derecognising regulatory deferral account balances in former subsidiary Disclosure Xduration, credit 824500

Appendix CEffective date and transition

This appendix is an integral part of the Standard.

Effective date and transition

Effective date

C1

An entity shall apply this Standard if its first annual IFRS financial statements are for a period beginning on or after 1 January 2016. Earlier application is permitted. If an entity applies this Standard in its first annual IFRS financial statements for an earlier period, it shall disclose that fact.

[Refer:Basis for Conclusions paragraphs BC53 and BC54]

Appendix DConsequential amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards

This appendix sets out an amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards that is a consequence of the IASB issuing IFRS 14. An entity shall apply the amendment for annual periods beginning on or after 1 January 2016. Earlier application is permitted. If an entity applies IFRS 14 for an earlier period, the amendment shall be applied for that earlier period.

* * * * *

The amendment contained in this appendix when this IFRS was issued in 2014 has been incorporated into the text of IFRS 1 published in this volume.

Board Approvals

Approval by the Board of IFRS 14 Regulatory Deferral Accounts issued in January 2014

International Financial Reporting Standard 14 Regulatory Deferral Accounts was approved for issue by thirteen of the sixteen members of the International Accounting Standards Board. Messrs Edelmann, Gomes and Zhang voted against its publication. Their dissenting opinions are set out after the Basis for Conclusions.

Hans HoogervorstChairman
Ian MackintoshVice-Chairman
Stephen Cooper
Philippe Danjou
Martin Edelmann
Jan Engström
Patrick Finnegan
Amaro Luiz de Oliveira Gomes
Gary Kabureck
Prabhakar Kalavacherla
Patricia McConnell
Takatsugu Ochi
Darrel Scott
Chungwoo Suh
Mary Tokar
Wei-Guo Zhang

Footnotes

1

In 2010, the IASB replaced the IASC’s Framework for the Preparation and Presentation of Financial Statements adopted by the IASB in 2001 (Framework) with the Conceptual Framework for Financial Reporting (Conceptual Framework). The term “faithful representation”, which was used in the Conceptual Framework issued in 2010 and is also used in the revised version of the Conceptual Framework issued in 2018, encompasses the main characteristics that the Framework called “reliability”. The requirement in paragraph 13 of this Standard is based on the requirements of IAS 8, which retains the term “reliable”. (back)