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In January 2021 the International Accounting Standards Board (IASB) published its Exposure Draft Regulatory Assets and Regulatory Liabilities. The Exposure Draft sets out the IASB’s proposals for a model to account for regulatory assets and regulatory liabilities. 

The IASB discussed feedback on the Exposure Draft in October and November 2021 and its plans for redeliberating the proposals in the Exposure Draft in December 2021.

In July 2024, following completion of the redeliberations of the proposals in the Exposure Draft, the IASB confirmed it was satisfied that applicable due process requirements have been complied with and sufficient consultation and analysis were undertaken to begin the process for balloting the new IFRS Accounting Standard.

The IASB expects to publish the new Standard in the second quarter of 2026.  The new Standard will replace IFRS 14 Regulatory Deferral Accounts. 

IASB® Update October 2025

The IASB met on 30 October 2025 to discuss sweep issues identified in drafting the prospective IFRS Accounting Standard Regulatory Assets and Regulatory Liabilities (prospective Accounting Standard).

Inflation adjustments to the regulatory capital base (Agenda Paper 9A)

The IASB tentatively decided that the prospective Accounting Standard would:

  1. require that an entity recognise an inflation adjustment to its regulatory capital base in profit or loss as and when that adjustment is included in regulatory depreciation. All 12 IASB members agreed with this decision.
  2. not specify that the inflation adjustment is either a difference in timing or a measurement difference. All 12 IASB members agreed with this decision.
  3. not include disclosure requirements related to an inflation adjustment to an entity’s regulatory capital base. Eleven of 12 IASB members agreed with this decision.

Recognition conditions (Agenda Paper 9B)

The IASB tentatively decided that the prospective Accounting Standard would:

  1. specify that the defining feature of a direct relationship between an entity’s regulatory capital base and an underlying item is the entity’s ability to track, by amount and reporting period, how the amounts arising from the underlying item are compensated or charged for by regulatory depreciation;
  2. specify that the indicators of a direct relationship between an entity’s regulatory capital base and its depreciable or amortisable assets include:
    1. items (or classes) in the regulatory capital base being sufficiently similar to items (or asset classes) determined in accordance with IFRS Accounting Standards, for the entity to be able to track differences between these items or between these classes; and
    2. the regulator establishing an amount of regulatory depreciation based on the depreciation or amortisation expense determined in accordance with IFRS Accounting Standards;
  3. permit an entity to presume there is no direct relationship between its regulatory capital base and its depreciable or amortisable assets if the indicators in (b) are not present;
  4. require an entity to determine whether its regulatory capital base and its depreciable or amortisable assets have a direct relationship at the level at which the entity can track how amounts are compensated or charged for by regulatory depreciation, with the upper limit being the asset class level determined in accordance with IFRS Accounting Standards; and
  5. require an entity:
    1. to reassess whether there is a direct relationship between the regulatory capital base and an underlying item when there is a change in facts or circumstances or new information (for example, a change in the regulatory agreement) that might alter that relationship; and
    2. to disclose any change to or from such a direct relationship, and the reason for the change.

All 12 IASB members agreed with these decisions.

Next milestone

IFRS Accounting Standard