IFRS 20 – Regulatory Assets and Regulatory Liabilities

The IASB (International Accounting Standards Board) has introduced the new standard IFRS 20 Regulatory Assets and Regulatory Liabilities, which is set to replace the existing IFRS 14 Regulatory Deferral Accounts.

The objective of this standard is to address situations arising in rate-regulated environments where a timing mismatch occurs between the delivery of a product or service and the ability to reflect associated costs or revenues in regulated prices. The standard focuses on cases where a supplier earns a right to compensation related to the delivery of goods or services in a specific period, but this right can only be exercised against customers in a later period due to regulatory mechanisms.

The application of the new standard’s rules will primarily affect companies operating in the public utilities, energy, and transportation sectors.

The issuance of the standard is expected in the second quarter of 2026, with its effective date planned for January 1, 2029, including the option for early application.

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