The International Accounting Standards Board said Friday it is finalizing a new accounting standard that aims to give investors a clearer and more complete picture of the financial performance and future cash flows of rate-regulated companies.
IFRS 20, "Regulatory Assets and Regulatory Liabilities," will mostly affect companies in the utilities, energy and transportation industries, according to a spokesperson, where regulators set the rates companies can charge customers.
IFRS 20 will also address a gap in financial reporting. When the timing of regulated rates varies from the period in which goods or services are supplied, financial statements can give an incomplete picture of a company's performance and financial position. The new standard will require companies to recognize regulatory assets and regulatory liabilities arising from these timing differences.
The IASB expects to issue IFRS 20 in the second quarter of this year.
A webcast explaining the upcoming standard can be
