Regulatory deferral account: Difference between revisions
imported>Doug Williamson (NEW ENTRY - Created in response to IFRS 14 to define terminology. Source:http://www.ifrs.org/Current-Projects/IASB-Projects/rate-regulated-activities-interim-IFRS/Documents/Feedback-Statement-IFRS-14-January-2014.pdf and http://www.iasplus.com/en/st) |
imported>Doug Williamson (Add express reference to recognition of the items.) |
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''Financial reporting.'' | |||
Rate regulations allow the supplier to recover specified costs and other amounts through the prices charged to customers. To protect the interests of customers, rate regulation may defer the recovery of these amounts in order to reduce price volatility. | A regulatory deferral account is an amount recognised by a price-regulated entity, for example an electricity supplier. | ||
Rate regulations allow the supplier to recover specified costs and other amounts through the prices charged to retail customers, subject to the approval of a rate regulator. To protect the interests of customers, rate regulation may defer the recovery of these amounts, in order to reduce retail price volatility. | |||
The regulatory deferral amount is the balance of any expense (or income) account that would not otherwise be recognised as an asset or a liability in accordance with general Financial Standards, but qualifies for recognition because it is included, or is expected to be included, by a rate regulator in establishing the rate(s) that can be charged to customers in the future. | |||
The supplier usually keeps track of these deferred amounts in separate regulatory deferral accounts until they are recovered through future sales of the regulated goods or services. | The supplier usually keeps track of these deferred amounts in separate regulatory deferral accounts until they are recovered through future sales of the regulated goods or services. | ||
Revision as of 08:41, 18 January 2015
Financial reporting.
A regulatory deferral account is an amount recognised by a price-regulated entity, for example an electricity supplier.
Rate regulations allow the supplier to recover specified costs and other amounts through the prices charged to retail customers, subject to the approval of a rate regulator. To protect the interests of customers, rate regulation may defer the recovery of these amounts, in order to reduce retail price volatility.
The regulatory deferral amount is the balance of any expense (or income) account that would not otherwise be recognised as an asset or a liability in accordance with general Financial Standards, but qualifies for recognition because it is included, or is expected to be included, by a rate regulator in establishing the rate(s) that can be charged to customers in the future.
The supplier usually keeps track of these deferred amounts in separate regulatory deferral accounts until they are recovered through future sales of the regulated goods or services.
