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  • IFRIC D11 Issued 16 December 2004. Click for Press Release (PDF 59k).
  • Comment Deadline 1 March 2005
  • The draft Interpretation was available publicly on the IASB's Website during the comment period.
  • At its June 2005 meeting, IFRIC concluded not to develop a final interpretation since the IASB had decided to amend IFRS 2.

Deloitte Letter of Comment on this Draft Interpretation

Draft Interpretations are proposals that are not yet final.

Summary of IFRIC D11

IFRIC 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.

June 2005: IFRIC decision not to pursue a final interpretation

As a result of the IFRIC's deliberations on D11, the IASB had been asked to consider whether IFRS 2 should be amended. The IASB agreed to amend the Standard to clarify that:

  • The cancellation or settlement provisions do not apply only when the entity has cancelled the scheme (that is cancellations by the employee are also caught by these requirements); and
  • Vesting conditions are service or performance conditions.

At its June 2005 Meeting, the IFRIC agreed that, in light of these amendments, a final interpretation arising from D11 was not considered necessary at this time; however, members would consider whether there are any related issues that will not be resolved that should be brought back to the IFRIC Agenda Committee. It was noted that the Board would consider whether re-exposure was necessary for these amendments - the IFRIC strongly recommended that the amendments should be exposed, together with a comprehensive basis for conclusions.

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