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Share-Based Payment

Date recorded:

  • The Exposure Draft will have a 120-day comment period. (IASB's timetable calls for issuance in the fourth quarter of 2002.)
  • The measurement objective for share-based payment for employee services is to measure the value of the services received. To implement that objective, grant date measurement means that shares and share options will be valued at grant date (with expected lapses reflected), the number of units of employee service expected to be received over the service period will be estimated at grant date, and a cost per unit of services will be determined at grant date. Subsequently, expense will be recognised based on actual quantity of service received multiplied by the originally estimated per unit cost.
  • An entity should recognise all tax benefit it receives from issuance and exercise of shares and share options in net profit or loss, not directly in equity.
  • IAS 39 should continue to apply to commodity purchase contracts that are settled net even if those contracts are settled net in shares rather than cash. The Standard on share-based payment will have a scope exclusion clarifying this.
  • If a liability for a vested share appreciation right had been recognised at intrinsic value prior to the effective date of the new IASB Standard on share-based payment, it should not be revalued at the initial adoption of the new Standard.
  • If a share plan or option plan is cancelled during the vesting period (a) any additional resulting cost is charged to expense and (b) any cost previously measured at grant date should be recognised as expense over the remaining vesting period in a manner similar to a repricing.
  • If a subsidiary grants options excercisable in shares of its parent, in the subsidiary's own financial statements the subsidiary should recognise compensation cost and a capital contribution from its parent.
  • A reload feature should generally be taken into account in determining the fair value of an option at grant date. However, do not do so if it is impracticable to measure the value of the reload feature.
  • Implementation guidance for options with performance conditions will be added to the Standard.
  • The Standard on share-based payment will apply to all issuances of shares to acquire nonfinancial assets. Clarification of this will be added to some existing IAS.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.