D11 proposes that:

• If an employee stops contributing to an ESPP while remaining in the entity's employment, and, as a consequence, is no longer able to buy shares under the plan, the entity shall account for this event as a cancellation. Therefore, in accordance with paragraph 28(a) of IFRS 2, the entity shall recognise immediately as expense the amount that otherwise would have been recognised for services received over the remainder of the vesting period
• If an employee changes from one ESPP to another, and the entity identifies the equity instruments granted to the employee under the new ESPP as replacements for the equity instruments granted to that employee under the original ESPP, the entity shall account for this event as a modification of the original grant. If the entity does not identify the new equity instruments granted under the new ESPP as replacements for the equity instruments granted under the original ESPP, the entity shall account for:
  • (a) the employee's cessation of participation in the original ESPP as a cancellation
  • (b) the employee's commencement of participation in the new ESPP as a new grant of equity instruments.

Comments are due by 1 March 2005. Click for Press Release (PDF 54k).