INGAA comments on International Accounting Standards Board Exposure Draft

The Interstate Natural Gas Association of America (INGAA) provided comments on the International Accounting Standards Board’s (IASB) Exposure Draft, Regulatory Deferral Accounts – ED/2013/5.  IASB proposed a draft interim International Financial Reporting Standard (IFRS) for regulatory deferral accounts. There is currently no IFRS Standard that specifically addresses the accounting for rate-regulated activities.  By contrast, INGAA’s member pipelines follow Generally Accepted Accounting Principles (GAAP) accounting and, where appropriate, recognize regulatory assets and liabilities. 

INGAA provided extensive comments on IASB’s March 2013 Request for Information – Rate Regulation, and supports IASB’s first step, as proposed in the Exposure Draft, in recognizing rate-regulated assets. INGAA is encouraged that the draft interim Standard, if adopted, will enable cost-of-service regulated entities, such as INGAA’s members, to recognize the economic effects of rate regulation under IFRS. INGAA strongly believes that recording assets and liabilities that reflect the economic impacts of rate regulation best represents companies’ financial positions. FERC, in its comment letter of August 30, 2013, also acknowledges that recognizing the economic effects of rate regulation is an “essential matter to the Commission and the rate-regulated entities it regulates.”  INGAA supports FERC’s comments on the Exposure Draft.