Power and Utilities Alert 2012-5: Accounting for rate-regulated activities under IFRS

June 2012
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Power and Utilities Alert 2012-5: Accounting for rate-regulated activities under IFRS

At a glance

The January 2012 meeting of the International Financial Reporting Standards (IFRS) Interpretations Committee (the Committee) raised questions whether under IFRS customers within a regulatory jurisdiction can be combined into a single unit of account and how to recognize assets and liabilities.

At the January 18, 2012 meeting of the International Financial Reporting Standards (IFRS) Interpretations Committee (the Committee), the staff announced that it intended to bring to the Committee an agenda submission related to rate-regulated activities.

Subsequently, a Committee meeting was held on May 16, 2012 to discuss the agenda submission and next steps (the staff paper including the submission is attached as an Appendix to this Alert). The questions being asked in the submission were (1) whether under IFRS customers within a regulatory jurisdiction can be combined into a single unit of account and if so (2) whether it would be appropriate to recognize assets and liabilities arising out of regulation under IFRS.

This Power & Utilities Alert includes high level observations of the discussion at the IFRS Interpretations Committee meeting on May 16, 2012.