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EFRAG draft comment letter on the IASB's Exposure Draft of amendments to IFRS 2

  • EFRAG document (dk green) Image

16 Dec 2014

The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB Exposure Draft (ED) proposing amendments that would clarify the classification and measurement of share-based payment transactions.

ED/2014/5 Classification and measurement of share-based payment transactions considers the following the issues:

  • accounting for cash-settled share-based payment transactions that include a performance condition;
  • classification of share-based payment transactions with net settlement features; and
  • accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

In its draft comment letter, EFRAG generally agrees with the IASB's assessment of the issues and with its proposed amendments to address them, although EFRAG believes that in relation to the second amendment, the proposed classification reflects the economic substance of the plan, and therefore should not be characterised as an exception.

On a broader note, EFRAG is concerned that addressing more and more specific terms and conditions of different share-based plans is resulting in ever-increasing complexity in the requirements of IFRS 2. EFRAG believes that the IASB should envisage a more general review of IFRS 2 to consider all implementation issues in a principle-based way.

Comments on the draft comment letter were originally due by 30 January 2015; but has been extended to 9 March 2015. It is available on the EFRAG website.

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