Share-based payment Vesting Conditions and Cancellations
The purpose of this discussion was to examine concerns raised by one Board member in response to the ballot draft of the ED. This Board member disagreed with the way in which it appears that the grant date is commonly interpreted under IFRS 2.
The definition of grant date is not addressed by the proposed amendment to IFRS 2. However, there is an interaction between the determination of the grant date and the proposed cancellation requirements. At its May meeting, the Board decided that a cancellation cannot occur before the grant date. Since the grant dates in IFRS 2 and SFAS 123 (revised) could be different, the same event could be treated as a reversal of expense by one standard (because grant date has not yet occurred) and an acceleration of expense by the other standard (because grant date has occurred).
The Board acknowledged that the existing definition of grant date (in particular the term 'shared understanding') might be ambiguous.
The Board did not make any technical decisions regarding the grant date definition, but it discussed the following alternatives on how to proceed with the ED:
- Put out the ED as balloted and address the grant date issue in a separate project.
- Hold back the ED and address the grant date issue as part of this project. It was noted that this would require re-exposure.
The Board decided to vote on the way forward at the September 2007 meeting and directed the staff to prepare a paper discussing the grant date issue in more detail.