Scope

The Board re-debated the scope issues between ED2 and IAS 32-39. The Staff proposed three views:

Alternative 1 - All employee transactions are in the scope of Share-based Payment (SBP). Non-employees transactions are only in SBP scope if the transaction is considered as a normal transaction (under SBP definition) and if the value of the goods or services can be reliably valued, otherwise the transactions are in the scope of IAS 39.

Alternative 2 - All employee transactions are in the scope of SBP. For non-employees transactions, if the transaction is not normal (under IAS 39 definition) then it should be recognised as defined under IAS 39 unless it is a forward then it falls in SBP scope.

Alternative 3 - SBP should apply to all transactions that would otherwise be normal (normal for these purposes means other than speculative).

The Board agreed to decide at the next meeting. However, there was tentative support for alternative 1.

Transition

The Board agreed:

• for options affected by the 7 November 2002 date, the pre-comparative amount is adjusted through opening retained earnings,
• the fair value of liabilities will be determined on 7 November 2002 and accounted for from that date with adjustments to opening retained earnings of the comparative amounts, and
• full retrospective application is permitted for liabilities.

IFRS 1 will be modified based on the above.

The Board considered the taff's proposals for disclosure. These were generally accepted with additional disclosures for the vesting 'true-up'.