This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

EC formally endorses IFRS 2 for use in Europe

  • European Union (old) Image

08 Feb 2005

The European Commission has adopted a Regulation endorsing IFRS 2 Share-based Payment for use in Europe.

The Regulation takes effect retroactively to 1 January 2005. IFRS 2 requires companies to reflect the cost of all share-based payments, including employee stock options, as an expense. The text was supported almost unanimously by the Member States at the Accounting Regulatory Committee meeting on 20 December and by the European Parliament. A similar rule will go into effect in the United States beginning 15 June. EU Internal Market and Services Commissioner Charlie McCreevy said:

Endorsement of IFRS 2 is very much in the interest of European capital markets and European investors. Granting stock options can be a very effective way for companies to motivate managers and staff, but like any other form of remuneration, it has to be considered as an expense. IFRS 2 will improve the quality of financial reporting by giving financial markets a clearer and more complete picture of a company's transactions.

Click for (PDF 76k).

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.