IFRS 2 — Vesting and non-vesting conditions

Date recorded:

At the January 2010 meeting, the IFRIC had tentatively agreed to add a project to its agenda to clarify the distinction between a service condition, a performance condition, and a non-vesting condition. The staff an analysis and preliminary staff views. A number of IFRIC members were uncomfortable with the proposed list of issues identified by the staff for further research and analysis. Those members were also of the opinion that to analyse and amend/improve the issues identified by the staff will result in a complete rewrite of IFRS 2, which is a task that has to be performed by the Board.

One IFRIC member noted that the real issue troubling preparers at the moment is the interaction between multiple conditions, especially 'and', vs 'or' conditions, and that the IFRIC should only focus on this issue and leave the comprehensive review of IFRS 2 for the Board. Another IFRIC member observed that although US GAAP guidance on share-based payments is written in a different manner to IFRS 2, the principles are broadly the same, and the same issues are not encountered under US GAAP, as everybody is clear about what the requirements are for service and performance conditions.

The IFRIC instructed the staff to explore the guidance under US GAAP regarding the interaction of multiple conditions and determine whether it can be accommodated in IFRS 2 without contradicting any IFRS requirements.

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