Partner standard to IFRS 2 achieves purpose

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20 Aug 2014

The Financial Accounting Foundation (FAF) has conducted a post-implementation review (PIR) of Financial Accounting Standards Board (FASB) Statement No. 123(R) 'Share-Based Payment'. Statement 123(R) is is largely consistent with IFRS 2 'Share-Based Payment'. The review team notes in its final report that the standard achieves its purpose and "no standard-setting process recommendations resulted from our review".

In summary, the review team came to the conclusions below; however, the report notes that some of the observations are more true for public than for private companies:

  • Statement 123(R) "adequately resolved the issues underlying its need" by addressing user concerns, increasing comparability and simplifying the accounting requirements as well as by converging the requirements to a large degree with those in IFRS 2 Share-Based Payment.
  • The standard leads to decision useful information.
  • The standard is generally understandable, can be applied as intended, and leads to reliable information.
  • Ongoing costs of complying with the standard are in totality not significant.
  • The changes to financial and operating practices required by implementing the standard were significant but consistent with expectations.
  • The review team did not find any significant unanticipated consequences of the standard.

Please click for the following information on the FAF and FASB websites:

Our summary of IFRS 2 contains an overview of the differences that remained between the two standards when Statement 123(R) was issued in December 2004.

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