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Deloitte Touche Tohmatsu comment letter on ED 2

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14 Mar 2003

We have posted our , Share-Based Payment (PDF 230k).

Our comments expressed the following principal conclusions:

Deloitte Touche Tohmatsu Principal Conclusions on Share-Based Payments

  • Share-based payments should be measured and recognised at fair value. Share-based payments to employees represent an element of compensation. The most relevant measurement of that compensation is fair value.
  • Share-based payments should be expensed over the period that the related service is provided.
  • Share-based payments should be measured at grant date, being the date the parties are committed to the transaction.
  • No adjustment should be made to fair value for vesting conditions.
  • Expensing should stop if the employee leaves and consequently stops providing services.
  • Minimum value should be used for unlisted entities.
  • For transactions involving the exchange of goods directly for equity, a measurement date does not occur until the exchange actually occurs (not at an earlier agreement date).

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