This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IFRS 2 – Vesting Conditions and Cancellations

Date recorded:

Vesting conditions

The Board agreed that vesting conditions include performance conditions and service conditions only. As to whether a definition of vesting condition (and, by extension, 'performance condition' and 'service condition') was required, different opinions were expressed.

The Board agreed to develop further guidance, to be incorporated as an addition to the Implementation Guidance for IFRS 2, on the various conditions that may determine whether a counterparty obtains the equity instruments granted. This might take the form of a simple organisation chart or table.


More time was spent discussing the topic of cancellations and whether it should make a difference whether the cancellation comes about through the actions of the counterparty or the entity.

The Board agreed that cancellations are cancellations, which ever party brings them about and that no amendment to IFRS 2 should be made with respect to this principle.

However, the Board agreed to investigate further whether some of the schemes that were seen as causing the problem, such as Save As You Earn (SAYE) schemes, were truly share-based payment schemes. Board members noted that such schemes often required contributions and/or salary deductions from plan participants; these contributions were held in a segregated account by the plan sponsor until such time as the depositor purchased the shares using the amounts in the SAYE account. As such, the arrangement operates in a manner similar to a savings account with interest. It was not entirely obvious that there was a share-based element. The staff will investigate this further and revert to the Board.

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.