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ICAEW publishes its response on proposed amendments to IFRS 2

  • ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image

20 Mar 2015

The Institute of Chartered Accountants in England and Wales (ICAEW) has published its representation to the International Accounting Standards Board (IASB) on Exposure Draft 2014/5 ‘Classification and Measurement of Share-based Payment Transactions: Proposed amendments to IFRS 2’.

The IASB's exposure draft, published in November 2014, addresses the following issues that had been brought to its attention in relation to accounting for share-based payments:

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

In their response, the ICAEW express support for the IASB's proposals. However, they note that IFRS 2 Share-based Payment continues to attract a wide range of application and interpretation issues and for this reason encourage the IASB to continue with its longer-term research project on the standard.

In addition, the ICAEW express a preference that the IASB's proposed new paragraphs outlining the principles for accounting for modifications to cash-settled share-based payments should appear in the body of the standard, rather than in an appendix as proposed.  They also agree that entities should be given a choice over whether to apply the amendments prospectively or retrospectively but do not agree that the current drafting of the amendment is entirely clear.

The full response can be downloaded from the ICAEW website.

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