LATEST UPDATE

IASB issues IFRS 20 to improve financial reporting for companies subject to rate regulation

The International Accounting Standards Board (IASB) issued IFRS 20 Regulatory Assets and Regulatory Liabilities, a new Accounting Standard for companies subject to a specific type of rate regulation that determines how much and when a company can charge customers. It aims to help investors better understand how that rate regulation affects a company’s financial performance, financial position and its prospects for future cash flows.

The new Standard requires companies to account for the effects of differences in timing in their financial statements, i.e. if there is a difference between when a company supplies regulatory goods and services and when it charges customers, reported revenue may not fully reflect the company’s performance in a period.

IFRS 20 is effective for annual reporting periods beginning on or after 1 January 2029. Companies may choose to apply the Standard earlier.

IFRS 20 supplements the information a company provides when applying IFRS 15 Revenue from Contracts with Customers and replaces IFRS 14 Regulatory Deferral Accounts.

IFRS Digital subscribers may access the standard and supporting materials on: https://www.ifrs.org/news-and-events/news/2026/05/iasb-issues-ifrs-20/