The International Accounting Standards Board (IASB) is preparing to finalize a new accounting standard aimed at making financial reporting clearer for companies affected by rate regulation. IFRS 20, called “Regulatory Assets and Regulatory Liabilities,” is designed to help investors see how regulatory rules shape a company’s financial results and future cash flows. 

According to a report by Accounting Today, industries like utilities, energy providers, and transportation companies often have their prices set by government regulators. The IASB says the new standard will close this reporting gap by requiring companies to record regulatory assets and liabilities that result from these timing differences. With IFRS 20, investors should get a clearer picture of how regulation affects a company’s financial position and performance. 

The board says this standard will help investors better understand the long-term financial effects of regulatory decisions on companies in regulated markets. The IASB plans to release IFRS 20 in the second quarter of this year.