EFRAG's final comments on IFRIC D11

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

08 Apr 2005

The European Financial Reporting Advisory Group (EFRAG) has released its letter of comment on IFRIC Draft Interpretation D11 Changes in Contributions to Employee Share Purchase Plans (ESPPs).

The letter expresses agreement with one aspect of the proposed consensus but disagrees with another. EFRAG agrees that if an existing ESPP is replaced by a new ESPP, the entity should account for this replacement as a modification of the original plan in accordance with IFRS 2. However, EFRAG disagrees with the proposed consensus on how to account if an employee stops contributing to an ESPP while remaining in the entity's employment. D11 proposes that the entity account for this event as a cancellation and, therefore, should recognise immediately as expense the amount that otherwise would have been recognised for services received over the remainder of the vesting period. EFRAG's letter raises questions about the basis for IFRIC's proposed consensus. Click to download EFRAG's Letter on D11 (PDF 17k).

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