The lack of specific guidance on accounting for rate-regulated activities under IFRS is often seen as a hurdle that holds companies back from adopting IFRS in certain parts of the world. In response to this, the IASB has issued proposals for an interim IFRS.
The interim standard would allow a so-called ‘grandfathering approach’, meaning that first-time adopters of IFRS that are subject to rate regulation could opt to continue to apply their existing accounting principles to rate-regulated activities. However, this decision would have lasting implications.
Comments are due to the IASB by 4 September 2013.