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EFRAG has issued its draft comment letter to IASB ED 2009/8 Rate-regulated Activities
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EFRAG has issued its draft comment letter on the IASB's ED 2009/8 Rate-regulated Activities. Comments are invited on the draft letter by 24 November 2009.
The IASB's proposals are set out in an exposure draft Rate-regulated Activities. The objective of the proposals is to establish how assets and liabilities resulting from rate-regulated activities should be recognised and measured under a new (proposed) IFRSs.
EFRAG acknowledges and supports the IASB's objective of eliminating diverdence in practice on the accounting for rate-regulated activities, and to some extent achieve closer convergence with the accounting under US GAAP. However, EFRAG has a number of significant concerns with the proposals, in particular:
- EFRAG members hold different views on whether the economic effects of rate-regulation gives rise to assets and liabilities as defined in the Framework, although the majority of EFRAG members believe that they do.
- Some EFRAG members do not see a need for a stand-alone IFRS on rate-regulated activities.
- EFRAG members have some concerns with the scope criterion proposed in paragraph 3(b) of the ED.
- EFRAG does not support the proposed removal of the recognition criteria as well as the proposed expected present value measurement approach.
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