Month End Glossary

IFRS 14 - Regulatory Deferral Accounts

IFRS 14, Regulatory Deferral Accounts, provides guidance on the accounting treatments for deferral account balances used by entities in regulated industries.

IFRS 14, Regulatory Deferral Accounts, was issued by the International Accounting Standards Board (IASB) to help entities manage specific deferral account balances in regulated industries. The purpose of this standard is to allow entities, transitioning to the International Financial Reporting Standards (IFRS), to continue applying previous accounting policies for regulatory deferral account balances during the transition, provided certain criteria are met. This standard is relevant for organizations where pricing or revenue recognition is impacted by regulatory decisions, especially in industries such as utilities where entities might have deferral account balances that qualify under regulatory frameworks.

The requirements under IFRS 14 are limited to first-time IFRS adopters and focus on compliance with requirements for recognizing, measuring, and presenting regulated deferral account balances on the financial statements. IAS 1 - Presentation of Financial Statements may also be used in conjunction with IFRS 14 to aid in presentation. For instance, companies transitioning might continue recognizing deferral accounts under the previous GAAP while disclosing them appropriately.

Example sentence: IFRS 14 enables a utility company, transitioning from national accounting standards to IFRS, to retain its previous regulated deferral account practices whilst ensuring sufficient disclosure.

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