Amendment to IFRS 2 - Group Group Cash-settled Share-based Payment Arrangements

Date recorded:

Issues arising from drafting the pre-ballot draft of amendments to IFRS 2

The Board agreed to replace the existing paragraph 3 that addresses shareholder transfers with a new paragraph 3A to state clearly the clarified scope of IFRS 2 for group share-based payment transactions. The Board confirmed that they did not think that the new wording represented a change in guidance for those group transactions already in the scope of IFRS 2.

The Board agreed that the final amendments to IFRS 2 should:

  • explicitly include in the scope of IFRS 2 a settling entity only in a group share-based payment transaction, and
  • not include a settling group entity in the revised defined terms of 'equity-settled' and 'cash-settled' share-based payment transactions.

The Board agreed that that the accounting for transfers of employees among group entities for all awards that are accounted for as equity-settled should remain the same as the consensus reached in IFRIC 11.

The Board agreed that that the defined term 'share-based payment arrangement' not be amended to refer to the goods or services that the suppliers provide. (There was a concern that, because the notion of 'exchange of goods or services' is not part of the defined term 'share-based arrangement' but is included in the defined term 'share-based transaction', some inconsistency in practice would emerge.)

The Board amended paragraphs 44 and 45(a) of IFRS 2 related to the disclosure requirements to replace the term 'share-based payment arrangement' with 'share-based payment transaction'.

The Board reviewed an analysis of the criteria for re-exposure and concluded that re-exposure was not necessary.

The Board agreed that the effective date for the amendments should be accounting periods beginning on or after 1 January 2010.

The Board reaffirmed the retrospective transitional requirements as proposed in the ED and permitted the use of amounts previously recognised in the group's financial statements in the group entity's stand-alone financial statements if the information necessary for retrospective application is not available.

The Board agreed to add an example that addresses group cash-settled share-based payment transactions as Application Guidance.

No Board members indicated that they would dissent from the Amendments.

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