Deloitte response to IFRIC's tentative decision not to take onto the IFRIC’s agenda a request for interpretation of the appropriate accounting in accordance with IFRS 3 Business Combinations for contingent payments to selling shareholders in circumstances in which those selling shareholders become, or continue as, employees (specifically on whether paragraph B55(a) of IFRS 3 is conclusive in determining that payments to an employee that are forfeited upon termination of employment are remuneration for post-combination services).

We do not agree with the IFRS Interpretations Committee’s observation that an arrangement in which contingent payments are automatically forfeited if employment terminates should lead to a conclusion that the arrangement is compensation for post-combination services as the tentative agenda decision does not provide a justification by reference to the Standard for this observation, nor does it rebut the submitter’s correct assertion that paragraph B55 introduces subparagraphs (a) to (h) as indicators but paragraph B55(a) uses conclusive language stating that the arrangement described is remuneration for post-combination services.

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