IASB and FASB differ on tax effects of share-based payment

  • News default Image

31 Jul 2003

In separate meetings last week, the IASB and the FASB reached different conclusions on accounting for the income tax effects of share-based compensation transactions with employees.

The IASB reaffirmed the proposal in ED 2 that all tax effects of such transactions should be recognised in profit or loss. The FASB, on the other hand, concluded that if a deduction reported on a tax return for share-based compensation exceeds the cumulative compensation expense recognised for accounting purposes, the tax benefit of the excess is a direct credit to equity, which is the existing requirement of SFAS 123, Accounting for Stock-Based Compensation.

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.