Regulatory Accounting Practice: Report
ERG (06) 23
Produced/Adopted on: 19 May 2006; Total pages: 13
Regulatory Accounting in Practice
A Report prepared by the IRG Regulatory Accounting Working Group, April 2006
A. Executive Summary
This report provides an overview of the regulatory accounting systems across Europe. It is
prepared annually and updates the previous version published in 2005.
The data collected for this report covers a period when many countries were transitioning to
the new common regulatory framework for electronic communication networks and services.
This meant that the data collected, now based on defined economic markets, is not easily
comparable to data collected in previous years. Notwithstanding this, there are some
important trends discernable from the data, namely:
i) the use of Current Cost Accounting (CCA) as a cost base increased in the mobile
termination market (Fig. 3);
ii) there is further consolidation in the use of CCA as the preferred cost base for the
fixed termination market (Fig. 2);
iii) Long Run Average Incremental Cost (LRIC/LRAIC) methodologies (based on
CCA) are being used more extensively in
the mobile termination market (Fig. 6);
iv) the use of Fully Distributed Cost (FDC) and LRIC/LRAIC as costing
methodologies continue to dominate the fixed terminating market (Fig. 5).
Overall, and given the transition in the regulatory framework, there would appear to be clear
and continued indicators that the trend to more consistent and harmonised approaches to
regulatory accounting has been maintained.
The information given in this report is based on those market analyses already completed or
under consultation in 2006 and therefore also includes measures which are currently proposed
but subject to the completion of the consultation process.
ERG (06) 23
In September 2003 the IRG Regulatory Accounting Working Group (IRG RA WG) started a
data gathering process aimed at