When Canadian public companies were required to apply IFRS beginning in 2011, one of the major issues faced by some of them, particularly those whose revenues were regulated by an independent body, concerned the accounting for regulatory assets. This issue remains unresolved.

Instructions

Research the financial accounting issues related to rate regulation, beginning with the IASB website (www.ifrs.org) and the “Projects” and “Work plan” link: look for Rate regulated Activities. Answer the following questions.

a. Provide a brief history of the IASB’s rate regulation project, and explain where the project currently stands and what the future plans are for this issue.

b. Identify the type of companies that are considered rate-regulated, and explain what regulatory assets are.

c. Explain what the current accounting issues were with respect to reporting these assets.

d. What choice, if any, does the IASB have for settling this issue? Identify any progress that has been made since September 2014 in reaching a decision.