SIC-12 – Scope exemption for equity compensation benefits


The IFRIC was asked by the IASB to consider whether the scope exemption in SIC-12 Consolidation – Special Purpose Entities for equity compensation plans should be removed when IFRS 2 Share-based Payment becomes effective.

The scope exclusion in SIC-12 was included because equity compensation plans were within the scope of  IAS 19 Employee Benefits. However, once IFRS 2 is applied, IAS 19 would no longer apply to equity compensation plans.

Also, IFRS 2 amended IAS 32 Financial Instruments: Disclosure and Presentation to require treasury share accounting in relation to treasury shares purchased, sold, issued or cancelled in connection with share-based payment arrangements.  However, some arrangements may be structured through employee benefit trusts and removing the scope exclusion in SIC-12 would require an entity that controls such a trust to consolidate the trust and apply the requirements of IAS 32 to treasury shares held in the trust.


Current status of the project

This project has been completed. An amendment to Interpretation SIC-12 Consolidation – Special Purpose Entities was issued on 11 November 2004.


Project milestones

30 June 2004 IFRIC D7 Amendment of the Scope of SIC-12 Consolidation-Special Purpose Entities published Comment deadline 13 September 2004
11 November 2004 Amendment to SIC-12 Consolidation – Special Purpose Entities issued Effective for annual periods beginning on or after 1 January 2005

Correction list for hyphenation

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