Research project Share-based Payment

Date recorded:

Research project — IFRS 2 Share-based Payment — Agenda paper 16


The IFRS 2 research was in the assessment stage. The objective of this project had been to (i) identify the most common areas of complexity in the standard and (ii) analyse the causes for the significant number of interpretation requests that had been received.

The agenda paper provided an update on the research project on IFRS 2; summarised the feedback received in relation to the 2015 Agenda Consultation; and provided an overview of the staff analysis of such feedback. The Board woul decide on: (i) whether further work should be conducted on this topic; (ii) the staff recommendations; and (iii) the form of communication for publishing the staff findings.

The Board discussed in November 2015 an analysis of the findings prepared by the staff (see Agenda paper 16A below- reproduced from Agenda paper 16 from November 2015). 

The staff indicated that the following developments took place since November 2015:

  1. The FASB issued narrow-scope amendments to simplify the accounting for share-based payments. The staff believes that those amendments did not create divergence with IFRS 2.
  2. The Global Preparers Forum met in March 2016 and concluded that (i) most implementation issues have now been resolved; and (ii) replacing the grant date fair value measurement model with the current date fair value measurement model would lead to increased volatility of recognised share-based payment expenses;
  3. The ASAF met in April 2016 and had a similar conclusion.

Feedback obtained from the agenda consultation and staff analysis

The staff indicated that few respondents indicated that the project was of high importance. On the other hand, those respondents that indicated that the project was not important had mixed views to support this assessment. The most common response was that the standard is considered operational.

The staff believed that the research project is now complete. The staff considered that it would not be feasible to significantly reduce the complexity in IFRS 2 without reconsidering the grant date fair value measurement model. The staff also concluded that there was a need to analyse the root-causes of issues that arise in practice before issuing amendments to standards.

Staff recommendation

The staff recommended not to carry any further research on this topic. The staff also recommended issuing educational material on certain key matters in IFRS 2: (i) the nature of the information provided by the grant date fair value measurement model and (ii) the reasons why recognising an expense for share-based payments does not result in double counting. On the other hand, the staff did not recommend publishing a formal research or discussion paper.


There was general agreement with the staff recommendation.


Board members pointed out to the need to keep the information gathered by the staff. The staff should maintain the information not only on this project but also from other projects. It was mentioned that it would be important to find ways to make the information more visible even with projects that are out of the research programme. The staff indicated that there would be separate discussions depending on each project to determine the best way to communicate the research.

Other comments noted were:

  • the Board could come back to this project once the FICE project is finished;
  • it was important to determine the form to communicate the research; and
  • the information is quite technical and it is important to have it in a form that is understandable for those using it.  

The Chairman concluded the discussion and indicated that the format to be used to communicate the research would be discussed off-line.

IFRS 2 Share-based Payment research project — Report on research so far — Agenda paper 16A

Agenda Paper 16A was originally posted as AP 16 in November 2015. See below extracts from the summary provided in November 2015:

The staff identified on its research activities that the complexity in IFRS derives from (i) the complexity of the arrangements and (ii) the usage of the grant date fair value measurement model for arrangements that are settled in shares or in share options. The staff also identified the following application issues (i) difficulty in understanding the core principle of the Standard; (ii) perceived counterintuitive results in accounting for some transactions; (iii) complexity in classifying vesting and non-vesting conditions; and (iv) use of valuation assumptions which are not subsequently updated.

The staff also explored different approaches to move forward including (i) perform a post implementation review; (ii) perform further research on the grant date fair value measurement model; (iii) narrow scope amendments to IFRS or (iv) discontinue the project.

There were no comments raised during the discussion about this paper.

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