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IFRIC Interpretation on scope of IFRS 2

Jan 12, 2006

The International Financial Reporting Interpretations Committee (IFRIC) has issued a final Interpretation – IFRIC 8 'Scope of IFRS 2'.

IFRIC 8 clarifies that IFRS 2 Share-based Payment applies to arrangements where an entity makes share-based payments for apparently nil or inadequate consideration.

IFRIC 8 explains that, if the identifiable consideration given appears to be less than the fair value of the equity instruments granted or liability incurred, this situation typically indicates that other consideration has been or will be received. IFRS 2 therefore applies.

IFRIC 8 is effective for annual periods beginning on or after 1 May 2006. Earlier application is encouraged. Click for Press Release (PDF 59k).