IFRS 14 Regulatory Deferral Accounts prescribes special accounting for the effects of rate regulation. Rate regulation is a legal framework for establishing the prices that a public utility or similar entity can charge to customers for regulated goods or services.
Rate regulation can create a regulatory deferral account balance. A regulatory deferral account balance is an amount of expense or income that would not be recognized as an asset or liability in accordance with other Standards, but that qualifies to be deferred in accordance with IFRS 14 Regulatory Deferral Accounts, because the amount is included, or is expected to be included, by a rate regulator in establishing the price(s) that an entity can charge to customers for rate-regulated goods or services.
IFRS 14 Regulatory Deferral Accounts permits a first-time adopter within its scope to continue to account for regulatory deferral account balances in its IFRS financial statements in accordance with its previous GAAP when it adopts IFRS Standards. However, IFRS 14 Regulatory Deferral Accounts introduces limited changes to some previous GAAP accounting practices for regulatory deferral account balances, which are primarily related to the presentation of those balances.
IFRS 14 Regulatory Deferral Accounts is Copyright: IFRS Foundation