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IFRS 2 International Financial Reporting Standards (Ifrss) Together with Their Accompanying Documents Are Issued by the Internat

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IFRS 2 International Financial Reporting Standards (Ifrss) Together with Their Accompanying Documents Are Issued by the Internat IFRS 2 International Financial Reporting Standards (IFRSs) together with their accompanying documents are issued by the International Accounting Standards Board (IASB): 30 Cannon Street, London, EC4M 6XH, United Kingdom. Tel: +44 (0)20 7246 6410 Fax: +44 (0)20 7246 6411 Email: [email protected] Web: www.ifrs.org Copyright © 2004 IFRS Foundation IFRSs (which include International Accounting Standards and Interpretations) are copyright of the IFRS Foundation. The authoritative text of IFRSs is that issued by the IASB in the English language. Copies may be obtained from the IFRS Foundation Publications Department. Please address publication and copyright matters to: IFRS Foundation Publications Department 30 Cannon Street, London, EC4M 6XH, United Kingdom. Tel: +44 (0)20 7332 2730 Fax: +44 (0)20 7332 2749 Email: [email protected] Web: www.ifrs.org All rights reserved. No part of this publication may be translated, reprinted or reproduced or utilised in any form either in whole or in part or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without prior permission in writing from the IFRS Foundation. The IFRS Foundation logo, the IASB logo, the IFRS for SMEs logo, the ‘Hexagon Device’, ‘IFRS Foundation’, ‘eIFRS’, ‘IAS’, ‘IASB’, ‘IASC Foundation’, ‘IASCF’, ‘IFRS for SMEs’, ‘IASs’, ‘IFRS’, ‘IFRSs’, ‘International Accounting Standards’ and ‘International Financial Reporting Standards’ are Trade Marks of the IFRS Foundation © IFRS Foundation 1 IFRS 2 Approval by the Board of IFRS 2 issued in February 2004 International Financial Reporting Standard 2 Share-based Payment was approved for issue by the fourteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Hans-Georg Bruns Anthony T Cope Robert P Garnett Gilbert Gélard James J Leisenring Warren J McGregor Patricia L O’Malley Harry K Schmid John T Smith Geoffrey Whittington Tatsumi Yamada 2 © IFRS Foundation IFRS 2 Approval by the Board of Vesting Conditions and Cancellations (Amendments to IFRS 2) issued in January 2008 Vesting Conditions and Cancellations (Amendments to IFRS 2) was approved for issue by the thirteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Stephen Cooper Philippe Danjou Jan Engström Robert P Garnett Gilbert Gélard James J Leisenring Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang © IFRS Foundation 3 IFRS 2 Approval by the Board of Group Cash-settled Share-based Payment Transactions (Amendments to IFRS 2) issued in June 2009 Group Cash-settled Share-based Payment Transactions (Amendments to IFRS 2) was approved for issue by thirteen of the fourteen members of the International Accounting Standards Board. Mr Kalavacherla abstained in view of his recent appointment to the Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Stephen Cooper Philippe Danjou Jan Engström Robert P Garnett Gilbert Gélard Prabhakar Kalavacherla James J Leisenring Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang 4 © IFRS Foundation IFRS 2 BC CONTENTS BASIS FOR CONCLUSIONS ON IFRS 2 SHARE-BASED PAYMENT from paragraph INTRODUCTION BC1 SCOPE BC7 Broad-based employee share plans, including employee share purchase plans BC8 Transactions in which an entity cannot identify some or all of the goods or services received (paragraph 2) BC18A Transfers of equity instruments to employees (paragraphs 3 and 3A) BC19 Transactions within the scope of IFRS 3 Business Combinations BC23 Transactions within the scope of IAS 32 Financial Instruments: Presentation and IAS 39 Financial Instruments: Recognition and Measurement BC25 RECOGNITION OF EQUITY-SETTLED SHARE-BASED PAYMENT TRANSACTIONS BC29 ‘The entity is not a party to the transaction’ BC34 ‘The employees do not provide services’ BC36 ‘There is no cost to the entity, therefore there is no expense’ BC40 ‘Expense recognition is inconsistent with the definition of an expense’ BC45 ‘Earnings per share is “hit twice”’ BC54 ‘Adverse economic consequences’ BC58 MEASUREMENT OF EQUITY-SETTLED SHARE-BASED PAYMENT TRANSACTIONS BC61 Measurement basis BC69 Measurement date BC88 FAIR VALUE OF EMPLOYEE SHARE OPTIONS BC129 Application of option pricing models to unlisted and newly listed entities BC137 Application of option pricing models to employee share options BC145 RECOGNITION AND MEASUREMENT OF SERVICES RECEIVED IN AN EQUITY- SETTLED SHARE-BASED PAYMENT TRANSACTION BC200 During the vesting period BC200 Share options that are forfeited or lapse after the end of the vesting period BC218 MODIFICATIONS TO THE TERMS AND CONDITIONS OF SHARE-BASED PAYMENT ARRANGEMENTS BC222 SHARE APPRECIATION RIGHTS SETTLED IN CASH BC238 Is there a liability before vesting date? BC243 How should the liability be measured? BC246 How should the associated expense be presented in the income statement? BC252 SHARE-BASED PAYMENT TRANSACTIONS WITH CASH ALTERNATIVES BC256 The terms of the arrangement provide the employee with a choice of settlement BC258 The terms of the arrangement provide the entity with a choice of settlement BC265 SHARE-BASED PAYMENT TRANSACTIONS AMONG GROUP ENTITIES (2009 AMENDMENTS) BC268A Transfers of employees between group entities BC268P OVERALL CONCLUSIONS ON ACCOUNTING FOR EMPLOYEE SHARE OPTIONS BC269 Convergence with US GAAP BC270 Recognition versus disclosure BC287 Reliability of measurement BC294 © IFRS Foundation 5 IFRS 2 BC TRANSITIONAL PROVISIONS BC310A Share-based payment transactions among group entities BC310A CONSEQUENTIAL AMENDMENTS TO OTHER STANDARDS BC311 Tax effects of share-based payment transactions BC311 Accounting for own shares held BC330 DEFINITION OF VESTING CONDITION (2013 AMENDMENTS) BC334 Whether a performance target can be set by reference to the price (or value) of another entity (or entities) that is (are) within the group BC337 Whether a performance target that refers to a longer period than the required service period may constitute a performance condition BC339 Whether the specified period of service that the counterparty is required to complete can be either implicit or explicit BC346 Whether a performance target needs to be influenced by an employee BC347 Whether a share market index target may constitute a performance condition or a non-vesting condition BC353 Whether the definition of performance condition should indicate that it includes a market condition BC359 Whether a definition of ‘non-vesting condition’ is needed BC362 Whether the employee’s failure to complete a required service period due to termination of employment is considered to be a failure to satisfy a service condition BC365 Transition provisions BC370 6 © IFRS Foundation IFRS 2 BC Basis for Conclusions on IFRS 2 Share-based Payment This Basis for Conclusions accompanies, but is not part of, IFRS 2. Introduction BC1 This Basis for Conclusions summarises the International Accounting Standards Board’s considerations in reaching the conclusions in IFRS 2 Share-based Payment. Individual Board members gave greater weight to some factors than to others. BC2 Entities often issue1 shares or share options to pay employees or other parties. Share plans and share option plans are a common feature of employee remuneration, not only for directors and senior executives, but also for many other employees. Some entities issue shares or share options to pay suppliers, such as suppliers of professional services. BC3 Until the issue of IFRS 2, there has been no International Financial Reporting Standard (IFRS) covering the recognition and measurement of these transactions. Concerns have been raised about this gap in international standards. For example, the International Organization of Securities Commissions (IOSCO), in its 2000 report on international standards, stated that IASC (the IASB’s predecessor body) should consider the accounting treatment of share-based payment. BC4 Few countries have standards on the topic. This is a concern in many countries, because the use of share- based payment has increased in recent years and continues to spread. Various standard-setting bodies have been working on this issue. At the time the IASB added a project on share-based payment to its agenda in July 2001, some standard-setters had recently published proposals. For example, the German Accounting Standards Committee published a draft accounting standard Accounting for Share Option Plans and Similar Compensation Arrangements in June 2001. The UK Accounting Standards Board led the development of the Discussion Paper Accounting for Share-based Payment, published in July 2000 by IASC, the ASB and other bodies represented in the G4+1.2 The Danish Institute of State Authorised Public Accountants issued a Discussion Paper The Accounting Treatment of Share-based Payment in April 2000. More recently, in December 2002, the Accounting Standards Board of Japan published a Summary Issues Paper on share- based payment. In March 2003, the US Financial Accounting Standards Board (FASB) added to its agenda a project to review US accounting requirements on share-based payment. Also, the Canadian Accounting Standards Board (AcSB) recently completed its project on share-based payment. The AcSB standard requires recognition of all share-based payment transactions, including transactions in which share options are granted to employees (discussed further in paragraphs BC281 and BC282). BC5
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