Share-based Payment

Date recorded:

The Board was given an update on the US FASB re-deliberations of the FASB Exposure Draft on share-based payment. The staff noted several differences that may exist if the FASB proceed on their current path - notably the treatment of deferred taxes, scope, debt-equity distinction, and the option proposed by the FASB to recognise expense relating to options with graded vesting conditions on a straight-line basis.

The Board believed the biggest difference related to deferred tax and discussed their concern over the FASB's approach. Specifically, IFRS 2 measures deferred tax based on the current intrinsic value. The FASB's proposal is to measure the deferred tax on the compensation expense recognised, thereby reducing the amount shown as compensation expense as it would be presented net of tax. The IASB does not agree with this approach, but will consider this issue during the convergence project once the FASB completes all of its phases of its share-based payment project (which could be several years).

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