Classification and Measurement of Share-based Payment Transactions (Amend IFRS 2)

BACKGROUND

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend International Financial Reporting Standard (IFRS) 2 Share-based Payment.

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The objective of this project is to clarify:

  • the effects of vesting conditions on the measurement of a cash-settled share-based payment;   
  • the classification of share-based payment transactions with net settlement features; and
  • the accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.  

The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal.  Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRSs for publicly accountable enterprises.

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PROJECT NEWS

Final Amendments – Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)
June 30, 2016.  The IASB has issued narrow-scope amendments clarifying how to account for certain types of share-based payment transactions. The amendments are effective for annual periods beginning on or after January 1, 2018 with earlier application permitted.

AcSB Response to the IASB – Classification and Measurement of Share-based Payment Transactions
On March 26, 2015, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in November 2014. Overall, the letter supports the IASB’s proposals. However, the AcSB recommended that certain of the proposals provide additional clarification, be expanded to include guidance for other share-based payment modification transactions and be amended to reflect that changes to the fair value of a modified share-based payment liability may relate to a future service period and that the immediate recognition of this incremental change in profit and loss may not be appropriate when there are further vesting conditions. Read the AcSB letter  posted by the IASB.

AcSB Decision Summary – March 18-19, 2015
The AcSB approved its response letter to the IASB’s Exposure Draft, “Classification and Measurement of Share-based Payment Transactions (Proposed amendments to IFRS 2 Share-based Payment),” subject to drafting changes.

AcSB Decision Summary – February 11, 2015
The AcSB discussed the points to be included in its response letter to the IASB’s Exposure Draft, “Classification and Measurement of Share-based Payment Transactions (Proposed amendments to IFRS 2 Share-based Payment),” after considering stakeholder input received from outreach activities. No decisions were made.

Canadian stakeholders are encouraged to respond directly to the IASB by the March 25, 2015 comment deadline.

AcSB Exposure Draft – Classification and Measurement of Share-based Payment Transactions (Proposed amendments to IFRS 2)
January 6, 2015. The AcSB has issued an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Canadian stakeholders are encouraged to submit their comments, on the form provided, by March 25, 2015.

IASB Exposure Draft – Classification and Measurement of Share-based Payment Transactions (Proposed amendments to IFRS 2)
November 28, 2014. The IASB has issued an Exposure Draft proposing amendments to IFRS 2 Share-based Payment. Canadian stakeholders are encouraged to submit their comments to the IASB by March 25, 2015.

 

 

Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.