IFRS 2 — Employee share loan plans

Date recorded:


The IFRIC was asked to consider the accounting treatment of employee share loan plans under IFRS 2 Share-based Payment. Under many such plans, employee share purchases are facilitated by means of a loan from the issuer with recourse only to the shares. The IFRIC was asked whether the loan should be considered part of the potential share-based payment, with the entire arrangement treated as an option, or whether the loan should be accounted for separately as a financial asset.


Decision not to add

November 2005



The IFRIC noted that the issue of shares using the proceeds of a loan made by the share issuer, when the loan is recourse only to the shares, would be treated as an option grant in which options were exercised on the date or dates when the loan was repaid. The IFRIC decided it would not expect diversity in practice and would not take this item onto its agenda.


IFRIC reference: IFRS 2-1

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