Document ID: chunk:federal_register_of_legislation:F2022C00487:reg:36:p4
Version: federal_register_of_legislation:F2022C00487
Segment Type: reg
Provision Reference: reg 36 (pt 4/12)
Character Range: 33235–36257

not prohibit the recognition of regulatory deferral account balances arising from timing differences that did not exist immediately prior to the date of transition to Australian Accounting Standards but are consistent with the entity's accounting policies established in accordance with paragraph 11 (for example, storm damage costs).

Applicability of other Standards
B7 An entity that is within the scope of, and that elects to apply, the requirements of this Standard shall continue to apply its previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. However, paragraphs 16–17 state that, in some situations, other Standards might also need to be applied to regulatory deferral account balances in order to reflect them appropriately in the financial statements. The following paragraphs outline how some other Standards interact with the requirements of this Standard. In particular, the following paragraphs clarify specific exceptions to, and exemptions from, other Standards and additional presentation and disclosure requirements that are expected to be applicable.

Application of AASB 110 Events after the Reporting Period
B8 An entity may need to use estimates and assumptions in the recognition and measurement of its regulatory deferral account balances. For events that occur between the end of the reporting period and the date when the financial statements are authorised for issue, the entity shall apply AASB 110 to identify whether those estimates and assumptions should be adjusted to reflect those events.

Application of AASB 112 Income Taxes
B9 AASB 112 requires, with certain limited exceptions, an entity to recognise a deferred tax liability and (subject to certain conditions) a deferred tax asset for all temporary differences. A rate-regulated entity shall apply AASB 112 to all of its activities, including its rate-regulated activities, to identify the amount of income tax that is to be recognised.
B10 In some rate-regulatory schemes, the rate regulator permits or requires an entity to increase its future rates in order to recover some or all of the entity's income tax expense. In such circumstances, this might result in the entity recognising a regulatory deferral account balance in the statement of financial position related to income tax, in accordance with its accounting policies established in accordance with paragraphs 11–12. The recognition of this regulatory deferral account balance that relates to income tax might itself create an additional temporary difference for which a further deferred tax amount would be recognised.
B11 Notwithstanding the presentation and disclosure requirements of AASB 112, when an entity recognises a deferred tax asset or a deferred tax liability as a result of recognising regulatory deferral account balances, the entity shall not include that deferred tax amount within the total deferred tax asset (liability) balances. Instead, the entity shall present