IFRS 14 Regulatory Deferral Accounts is issued by the International Accounting Standards Board (IASB).

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INTERNATIONAL FINANCIAL REPORTING STANDARD 14 REGULATORY DEFERRAL ACCOUNTS   OBJECTIVE SCOPE RECOGNITION, MEASUREMENT, IMPAIRMENT AND DERECOGNITION PRESENTATION DISCLOSURE APPENDICES A Defined terms B Application Guidance C Effective date and transition D Amendments to other IFRSs APPROVAL BY THE BOARD OF IFRS 14 REGULATORY DEFERRAL ACCOUNTS ISSUED IN JANUARY 2014 BASIS FOR CONCLUSIONS ON IFRS 14 REGULATORY DEFERRAL ACCOUNTS DISSENTING OPINIONS ILLUSTRATIVE EXAMPLES

International Financial Reporting Standard 14 Regulatory Deferral Accounts (IFRS 14) is set out in paragraphs 1-36 and Appendices A-C. 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 International Financial Reporting 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.

Introduction

IFRS 14 Regulatory Deferral Accounts (this 'Standard'), describes regulatory deferral account balances as amounts of expense or income that would not be recognised as assets or liabilities in accordance with other Standards, but that qualify to be deferred in accordance with this Standard because the amount is included, or is expected to be included, by the rate regulator in establishing the price(s) that an entity can charge to customers for rate-regulated goods or services.

This Standard permits a first-time adopter within its scope to continue to account for regulatory deferral account balances in its first IFRS financial statements in accordance with its previous GAAP when it adopts IFRS. However, IFRS 14 introduces limited changes to some previous GAAP accounting practices for regulatory deferral account balances, which are primarily related to the presentation of these accounts.

The scope of this Standard is limited to first-time adopters that recognised regulatory deferral account balances in their financial statements in accordance with their previous GAAP, as defined in IFRS 1 First-time Adoption of International Financial Reporting Standards (ie the basis of accounting that a first-time adopter used immediately before adopting IFRS). An entity that is within the scope of, and that elects to apply, this Standard in its first IFRS financial statements continues to apply it in the entity's subsequent financial statements.

This Standard is effective for annual periods beginning on or after 1 January 2016. Earlier application is permitted

Reasons for publishing this Standard

there is currently no Standard in IFRS that specifically addresses the accounting for rate-regulated activities. Consequently, an entity is required to determine its accounting policy for the financial effects of rate regulation in accordance with paragraphs 10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The IASB has not seen evidence of significant diversity in practice within jurisdictions that are

enhance the comparability of financial reporting by reducing barriers to

the adoption of IFRS by entities with rate-regulated activities until guidance is developed through the IASB's comprehensive Rate-regulated

Activities project; and

ensure that users of financial statements will be able to clearly identify

the amounts of regulatory deferral account balances, and movements in those balances, in order to be able to compare the financial statements of

permits an entity that adopts IFRS to continue to use, in its first and

subsequent IFRS financial statements, its previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances without

specifically considering the requirements of paragraph 11 of IAS 8;

requires entities to present regulatory deferral account balances as separate line items in the statement of financial position and to present movements in those account balances as separate line items in the

statement of profit or loss and other comprehensive income; and

requires specific disclosures to identify the nature of, and risks associated with, the rate regulation that has resulted in the recognition of regulatory deferral account balances in accordance with this Standard.

(a)       conducts rate-regulated activities; and

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

     An entity shall apply the requirements of this Standard in its financial  statements 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.

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.

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

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).

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

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.

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.

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

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.

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 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.

(a)       will not be reclassified subsequently to profit or loss; and

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

     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

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).

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).

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).

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