An entity is permitted to apply the requirements of this Standard in its first Ind AS financial statements, if and only if, it:
conducts rate-regulated activities; andrecognised amounts that qualify as regulatory deferral account balances in its financial statements in accordance with its previous GAAP.
Ind AS 114
An entity shall apply the requirements of the Standard in its financial statements for subsequent periods, if and only if, in its first Ind AS financial statements, it recognised regulatory deferral account balances by electing to apply the requirements of this Standard. Entity that is within the scope of, and that elects to apply, this Standard shall apply all of its requirements to all regulatory deferral account balances that arise from all of the entity’s rate-regulated activities. An entity that has rate-regulated activities and that is within the scope of, and elects to apply, this Standard shall apply paragraphs 10 and 12 of Ind AS 8 when developing its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances.
Application
On initial application of this Standard, an entity shall continue to apply previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances, except for any changes permitted by paragraphs 13–15 of the Standard. However, the presentation of such amounts shall comply with the presentation requirements of this Standard, which may require changes to the entity’s previous GAAP presentation policies. An entity shall not change its accounting policies in order to start to recognise regulatory deferral account balances. An entity may only change its accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances, if the change makes the financial statements more relevant to the economic decision-making needs of users and no less reliable, or more reliable and no less relevant to those needs. entity shall judge relevance and reliability using the criteria in paragraph 10 of Ind AS 8.
Exemption
Any specific exception, exemption or additional requirements related to the interaction of the Standard with other Standards are contained within the Standard. In the absence of any such exception, exemption or additional requirements, other Standards shall apply to regulatory deferral account balances in the same way as they apply to assets, liabilities, income and expenses that are recognised in accordance with other Standards. An entity shall present separate line items in the balance sheet for:
the total of all regulatory deferral account debit balances; andthe total of all regulatory deferral account credit
An entity that elects to apply this Standard shall disclose information that enables users to assess:
the nature of, and the risks associated with, the rate regulation that establishes the price(s) that the entity can charge customers for the goods or services it provides; andthe effects of that rate regulation on its financial position, financial performance and cash
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