IFRS 20: New Standard on Regulatory Assets and Liabilities

Posted 21 April 2026 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The IFRS Foundation has announced the development of IFRS 20, a new standard addressing the recognition and measurement of regulatory assets and regulatory liabilities.

In terms of the forthcoming regulatory framework, IFRS 20 will replace the interim standard, IFRS 14 Regulatory Deferral Accounts. The new standard is designed to provide a comprehensive accounting model for entities whose revenue is determined by a regulator through specific rate-setting mechanisms. This typically includes entities operating in the utilities, energy, and transportation sectors.

The objective of IFRS 20 is to require companies to provide information about:

  • Regulatory assets and regulatory liabilities; and
  • Regulatory income and regulatory expenses.

By mandating these disclosures, the standard aims to ensure that investors can better understand the relationship between a company’s financial performance and the regulatory environment in which it operates. Under current standards, the timing of price adjustments often creates a mismatch between when expenses are incurred and when they are recovered through rates.

The IFRS Foundation expects to issue the final standard in the second quarter of 2026. IFRS 20 will be effective for annual reporting periods beginning on or after 1 January 2029.

Click here to download the IFRS 20 webcast slides or view the project overview.

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge base to include the new recognition and measurement criteria for regulatory assets before the 1 January 2029 effective date.
  • For your business: Accounting practices must evaluate the impact on internal reporting templates and valuation models for clients in rate-regulated industries to accommodate the new disclosure requirements.
  • For your clients: Entities in the energy and transport sectors must perform a gap analysis between their current regulatory deferral accounting and the requirements of IFRS 20 to prepare for the 2029 implementation.

Originally published at https://accountingacademy.co.za/news/read/new-ifrs-20-accounting-standard-on-regulatory-assets-and-regulatory-liabilities

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