Vesting Conditions and Cancellations
The Board continued its deliberations on the interaction between the proposed amendment to IFRS 2— Vesting Conditions and Cancellations and the determination of the grant date.
The definitions of grant date in IFRS 2 and SFAS 123 (revised 2004) are similar. However, the determination of whether a grant date has occurred may be interpreted differently in practice. As a result, the same event could be treated as a reversal of expense under one standard (because grant date has not yet occurred) and an acceleration of expense under the other standard (because grant date has already occurred).
Previously, the Board acknowledged this difference but decided to proceed with finalising the amendment because there are more significant differences between IFRS 2 and SFAS 123 (revised 2004) and this issue could be considered as part of a second phase of work on share-based payments.
At this meeting, however, the Board was concerned that the differences in interpretation of the grant date could lead to different results under the two standards. The Board also was concerned that although the definition of grant date was not addressed by the proposed amendment, there is an important and close interaction between the determination of the grant date and the cancellation requirements. Therefore, the Board decided that some further deliberation on how the grant date should be determined would be helpful to constituents.
The Board was undecided about whether any further clarification of the determination of the grant date should be completed as a separate project or as part of the proposed amendment on vesting conditions and cancellations. The staff will bring a paper to the next meeting to discuss these issues.