29 January 2021To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON IASB EXPOSURE DRAFTED/2021/1 Regulatory Assets and Regulatory LiabilitiesComments to be received by 31 May 2021The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the IASB Exposure DraftED/2021/1 Regulatory Assets and Regulatory Liabilities. The Exposure Draft is availableon the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/.Rate regulation determines how much compensation an entity can charge its customers forgoods or services supplied in a period, and when the entity can include that compensationin the regulated rates charged.In some situations, the period when an entity supplies goods or services differs from theperiod when the entity can include compensation in the regulated rates. When those timingdifferences occur, the revenue an entity reports, and the assets and liabilities it reports, donot give a complete picture of the compensation that the rate regulation entitles the entityto charge for goods or services supplied in that period. Currently, IFRS Standards do notrequire entities to provide investors with information about such timing differences.The International Accounting Standards Board proposes to introduce an accounting modelto supplement the information entities provide. The proposed model is based on theprinciple that entities should reflect the total allowed compensation for goods or services ina period as part of the financial performance for that period. This would be implemented byreporting regulatory assets and regulatory liabilities in the balance sheet, and relatedregulatory income and regulatory expense in the income statement.The additional information would supplement the information entities already provide whenapplying current IFRS Standards, and help users understand the relationship between anentity’s revenue and expenses, and an entity’s regulatory assets and regulatory liabilities.The FRSC invites your comments on the proposal as set out in the Exposure Draft by 31May 2021 to allow your comments to be considered in developing its response to the IASB.Comments should be submitted in written form.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.
Invitation to Comment on IASB Exposure Draft ED/2021/1 Regulatory Assets and Regulatory Liabilities
下载原件29 January 2021To:
Members of the Hong Kong Institute of CPAsAll other interested partiesINVITATION TO COMMENT ON IASB EXPOSURE DRAFTED/2021/1 Regulatory Assets and Regulatory LiabilitiesComments to be received by 31 May 2021The Financial Reporting Standards Committee (FRSC) of the Hong Kong Institute ofCertified Public Accountants (Institute) is seeking comments on the IASB Exposure DraftED/2021/1 Regulatory Assets and Regulatory Liabilities. The Exposure Draft is availableon the Institute's website:
http://www.hkicpa.org.hk/en/standards-and-regulations/standards/financial-reporting/exposure-drafts/.Rate regulation determines how much compensation an entity can charge its customers forgoods or services supplied in a period, and when the entity can include that compensationin the regulated rates charged.In some situations, the period when an entity supplies goods or services differs from theperiod when the entity can include compensation in the regulated rates. When those timingdifferences occur, the revenue an entity reports, and the assets and liabilities it reports, donot give a complete picture of the compensation that the rate regulation entitles the entityto charge for goods or services supplied in that period. Currently, IFRS Standards do notrequire entities to provide investors with information about such timing differences.The International Accounting Standards Board proposes to introduce an accounting modelto supplement the information entities provide. The proposed model is based on theprinciple that entities should reflect the total allowed compensation for goods or services ina period as part of the financial performance for that period. This would be implemented byreporting regulatory assets and regulatory liabilities in the balance sheet, and relatedregulatory income and regulatory expense in the income statement.The additional information would supplement the information entities already provide whenapplying current IFRS Standards, and help users understand the relationship between anentity’s revenue and expenses, and an entity’s regulatory assets and regulatory liabilities.The FRSC invites your comments on the proposal as set out in the Exposure Draft by 31May 2021 to allow your comments to be considered in developing its response to the IASB.Comments should be submitted in written form.Comments may be sent by mail, fax or e-mail to:
Standard Setting DepartmentHong Kong Institute of Certified Public Accountants37th Floor, Wu Chung House213 Queen’s Road EastWanchai, Hong KongFax number (+852) 2865 6776E-mail: commentletters@hkicpa.org.hkComments will be acknowledged and may be made available for public review unlessotherwise requested by the respondent.