IASB Proposes Three Amendments to IFRS 2

Keywords: Mazars, Thailand, IFRS, IASB, Share Based Payments

11 February 2015

The three proposed amendments aim to clarify the accounting treatment of the following issues:

• The effects of vesting conditions on the measurement of a cash-settled share-based payment: the IASB proposes to clarify that accounting for the effects of vesting conditions on the measurement of a cash-settled share-based payment should follow the same approach used for measuring equity-settled share-based payments in paragraphs 19–21A of IFRS 2.
• Classification of share-based payment transactions with a net settlement feature: the IASB proposes to specify that a transaction with an employee tax withholding obligation should be classified as equity-settled in its entirety (including the withheld amount), if the entire transaction would have otherwise been classified as equity-settled, had it not included the net settlement feature.
• Modification to the terms and conditions of a cash-settled transaction leading to reclassification as an equity-settled transaction: the IASB proposes to amend the standard to specify the accounting treatment of such modifications:

           -    the fair value of the transaction is measured by reference to the fair value at the date of modification of the equity instruments granted as a result of the modification;

           -    the liability recognised in respect of the original cash-settled share-based payment is derecognised, and the equity-settled share-based payment is recognised to the extent that the services have been rendered prior to modification; and

           -    the difference between the carrying value of the derecognised liability and the amount recognised in equity is recognised in profit or loss.

The IASB proposes that these amendments should be applied prospectively, with the possibility of retrospective application where the entity has the necessary information.

Comments on this exposure draft may be submitted no later than 25 March 2015. PlThe exposure draft can be consulted at the IFRS website.