Dear Reader,

a few years ago, I found myself in a foreign country, caring for a baby and feeling quite lonely. I would spend hours walking along roads and forest paths with a pram (terrain wheels make all the difference, if you ask me), listening to podcasts. TED Talks, lifestyle experts, mother influencers, even IASB podcasts — they all did the job ;-).

One day, I listened to a man talking about his determination to become a certified psychologist. He joked that, as a civil servant in his thirties, he had almost eight hours of working time to spare. He stuck to his commitment, and after one year, he qualified for the entry exam for a psychology program at a university.

There is a saying that to master something with ease, you must dedicate at least 10,000 hours to practising the skill.

Looking back at some of my past accomplishments, I agree. The most valuable things in my life — skills, personal investments, and career milestones — took a fair amount of hours of hard work.

Perhaps that is the real key to commitment. Instead of looking ahead and feeling overwhelmed by the amount of work still to come, look back at the achievements that were worth the effort.

Some commitments, of course, stretch far beyond personal goals. In standard-setting, progress often takes years of discussion, deliberation, and refinement before the final result is ready.

Speaking of timeframes, IFRS 20 Regulatory Assets and Regulatory Liabilities has been in the pipeline for more than thirteen years, according to the project history published on ifrs.org.

IFRS 20 will replace IFRS 14 Regulatory Deferral Accounts from January 1, 2029.

IFRS 14 is an optional standard, available only to first-time adopters of IFRS. Until now, existing IFRS preparers have lacked guidance on accounting for timing differences commonly arising in regulated industries.

In practice, this led to a mixed approach, as the following example from Suez S.A. shows:

When Suez obtains, in return for the construction service, on the one hand an unconditional right to receive cash, and on the other hand a right to invoice users, then the consideration for revenue is recognised as a financial asset up to the amount of the unconditional right to receive cash, and as an intangible asset for the residual amount. This scheme corresponds to the ‘mixed’ model and concerns certain waste recovery contracts.

(Suez Group, France, Consolidated Financial Statements for the fiscal year ended December 31, 2024).

In one of my latest LinkedIn posts, I showed you an example of a regulatory asset.

Here is an example of a Regulatory Liability:

Better Waste Co. entered into a concession contract with a regulator for the refurbishment of recycling facilities in selected municipal areas. As a result of the investment, the entity received the permission to increase the annual fee charged to the population using those facilities by 1% immediately after the refurbishment was completed. The regulator has the right to charge a penalty of 1% of total revenue if there have been more than five malfunctions of the refurbished recycling facilities in the past two years. Better Waste Co. should apply judgement (e.g. by considering the technical parameters and experience with similar facilities) to recognise a regulatory liability, and the related expense, in the current period in regard to malfunctions of past periods. The debit side of the regulatory liability — a regulatory expense — decreases the total allowed compensation for the current period. During the time lag until the regulatory liability is fulfilled, the entity will be charged regulatory interest expense.

IFRIC March Meetings were held on March 16th and 17th. Here is a short briefing on each agenda topic:

Classification of a Foreign Exchange Difference from an Intragroup Monetary Liability (or Asset) (IFRS 18)

This topic stirred quite some emotions from the day it was first published by IFRIC in September 2025. The March meeting retains the proposal to address similar topics through an accounting policy choice:

View 1: exchange difference in the operating category as the default category and,

View 2: clasify the exchange rate differences in the same category in which the income and expenses from the intragroup loan would have been classified before their elimination on consolidation, or, if doing so would involve undue cost or effort, in the operating category.

IFRIC adjusted the wording to better reflect the underlying rationale for each of these policy choices. Full paper here: https://shorturl.at/0vvAy

Economic Benefits from Use of a Battery under an Offtake Arrangement (IFRS 16)

IFRIC proposes a clarification of wording concerning the question when an entity has the right to obtain substantially all the benefits from the use of an identified asset and has the right to direct the use of the asset. I wrote about the topic, too.

Reassessment of control (IFRS 10)

This discussion was driven by a submission describing a fact pattern in which an entity was initially involved in setting the purpose and design of an investee and therefore had control. The question was whether reassessment is necessary if the governing documentation of the investee is changed.

Feedback collected from respondents applying paragraph 8 of IFRS 10 indicates that the answer is, yes.

Assessment of a Specified Main Business Activity for the purposes of the Separate Financial Statements of a Parent (IFRS 18)

IFRIC retains the view that a parent in the fact pattern described in the submission does have a specified main business activity — specifically, a main business activity of investing in unconsolidated subsidiaries.

Scope of the Requirement to Disclose Expenses by Nature (IFRS 18)

This topic concerns paragraph 83, which specifies disclosures for line item expenses classified by function in the operating category of the statement of profit or loss.

The submission sought clarification on whether those requirements also apply to expenses listed in paragraph 75(b)–(c) of IFRS 18, i.e. amounts required by IFRS 9 Financial Instruments and IFRS 17 Insurance Contracts. IFRIC proposed adding Note 1 to paragraph IE7 of the Illustrative Examples on IFRS 18 for clarity.

Classification of Gains and Losses on a Derivative Managing a Foreign Currency Exposure (IFRS 18)

This topic concerns the classification of any gain or loss on a derivative financial instrument in an entity’s consolidated statement of profit or loss.

The Committee concluded that the entity is required to classify any gain or loss on the external derivative in the same category as the income and expenses affected by the risks the derivative is used to manage — in the fact pattern described in the request, this would be the financing category of the consolidated statement of profit or loss.

Presentation of Taxes or Other Charges that are Not Income Taxes within the Scope of IAS 12 (IFRS 18)

The question of taxes versus income taxes, similarly to foreign exchange differences, also caused vivid discusssions across the international accounting community. At its March meeting, IFRIC proposed refining the wording of two past IFRIC agenda decisions to clarify what is, and what is not, an income tax for the purposes of applying IFRS 18:

• Presentation of payments on non-income taxes (IAS 1 and IAS 12), from July 2012; and

• Classification of tonnage taxes (IAS 12), from May 2009.

Control Assessment for a Single-investor Fund

This topic relates to an interesting submission describing a fact pattern in which an investor, holding 99.9% of the investment in the fund, and a fund manager, holding 0.1% but having decision-making authority and exposure to variability of returns, assess whether control over the fund exists.

The investor — being the only investor in the fund other than the fund manager — assesses whether it is automatically deemed to have delegated decision-making authority to the fund manager if the fund manager is an agent.

IFRIC emphasised that, in this case as well, all three control criteria in accordance with IFRS 10 Consolidated Financial Statements must be met. If you want to take a deep dive into the concept of control, this paper is exactly right for you: ap10-initial-consideration.pdf

Finally— and I know this newsletter was a long one — here is my question, for you: Is there a goal in your life that you would be willing to invest 10,000 hours in to achieve?

Happy to hear your thoughts. Have a great accounting week.

Best, Barbora