The IASB published the Exposure Draft Regulatory Assets and Regulatory Liabilities (the ED) in January 2021. The ED proposes a new accounting model to give users of financial statements better information about a company's incremental rights (i.e., regulatory assets) and obligations (i.e., regulatory liabilities) arising from the rate regulation under which an entity operates and specifically the relevant enforceable regulatory agreement between an entity and the rate regulator. The ED`s objective is that entities in the scope of the proposed Standard should provide relevant information to financial statement users that faithfully represents how regulatory income and regulatory expense affect the entity’s financial performance, and how regulatory assets and regulatory liabilities affect its financial position. A high-level summary of the ED proposals can be found here.
From October 2020 to January 2021, EFRAG conducted an early-stage effects analysis to assess the impact of the proposals for both users and preparers. [related user report accessible here]. This survey is an extension of the early-stage effects analysis with a focus on a selection of topics. The survey, targeted at financial statement users, includes 15 questions on the potential impact including the expected costs and benefits of the proposed ED`s guidance. The findings will be reflected in EFRAG’s final comment letter.
The survey should take approximately 15-20 minutes to complete and can be completed with breaks being taken.