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EFRAG acknowledges and supports the IASB's objective of eliminating divergence 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 give 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.