The PwC global network of firms submitted comments on the IASB's Exposure draft ('ED'), Regulatory Deferral Accounts. We support the proposed interim standard on regulatory deferral balances. The interim standard will help resolve practice problems in some jurisdictions and reduce the barriers to adopting IFRS, but will not increase diversity in practice among entities that already apply IFRS. The proposed disclosures will facilitate comparability between entities that apply the interim standard and those that do not.
Interim standards can embed diversity in the accounting for specific issues under IFRS and allow entities to continue applying national practices that have not been discussed and agreed by the IASB, and have not been subject to due process. The board should therefore use this approach sparingly and only where there is a clear plan to resolve the practice issue in a reasonable time frame. However, we support the board’s decision to pursue a practical solution to the accounting for regulatory deferral balances for the reasons described above. We also support the board’s clear statement that the proposed interim solution does not prejudge the conclusions of the longer-term project to address the accounting for rate-regulated activities. The proposal to define the scope of the interim standard by reference to a description of rate-regulated activities is unnecessarily restrictive and will be impractical to apply. We are also concerned that any scope limitation other than by reference to IFRS 1 might presuppose the final conclusion of the longer-term project to address accounting for rate-regulated activities.
We also agree that the interim standard should be restricted to first-time adopters, which is consistent with the board’s objectives in proposing the interim solution.
Our letter outlines key points we would like to raise with the board and our responses to the board’s questions are included in Appendix 1.