IFRS 20: New Standard for Rate-Regulated Entities
In May 2026, the International Accounting Standards Board (IASB) issued IFRS 20 Regulatory Assets and Regulatory Liabilities, a new Accounting Standard that improves financial reporting for entities subject to rate regulation. IFRS 20 replaces IFRS 14 Regulatory Deferral Accounts and becomes effective on 1 January 2029, with early adoption permitted.
This standard applies to companies in regulated industries such as electricity, water, gas, and telecommunications, where a regulator determines how much the company can charge customers and when charges take effect. IFRS 20 requires entities to account for the timing differences between what they bill customers and what the regulator allows them to bill in future periods, by recognising regulatory assets and regulatory liabilities.
In practical terms, financial statements must now reflect not only current period billing, but also regulatory rights and obligations that will affect future rates. This provides users of financial statements with a clearer view of how rate regulation affects financial performance.
If your business operates in a rate-regulated sector or holds investments in utilities, water companies, or infrastructure, you should note the 1 January 2029 effective date. Consider liaising with your auditor and accountant to understand how IFRS 20 will affect your financial reporting. Non-regulated businesses reporting under IFRS generally do not need to apply this standard.