Welcome to the website of the IFRS Foundation and the IASB

Monday 28 July 2014

Banner graphic

Work plan for IFRSs

Share-based payment: vesting conditions and cancellations (IFRS 2)


Share-based payment - vesting conditions and cancellations (IFRS 2)



This project has been completed. In January 2008 the IASB issued amendments to IFRS 2. The new requirements come into effect on 1 January 2009, although earlier adoption is permitted.

Reason for the Amendment

IFRS 2 describes vesting conditions as including service conditions and performance conditions but is silent on whether other features of a share-based payment transaction are vesting conditions. IFRS 2 also specifies the accounting treatment when an entity cancels a grant of equity instruments. However, it does not state how cancellations by a party other than the entity should be accounted for.

The Board�s initial objective in this project was to amend IFRS 2 Share-based Payment to clarify the definition of vesting conditions and provide guidance on the accounting treatment of cancellations by parties other than the entity.

In light of the comment letters received the Board has also agreed to include clarification of the definition of vesting conditions and the treatment of all non-vesting conditions. In addition, the Board agreed to include some additional Implementation Guidance to clarify the requirements.

Scope of the Amendment

The amendment deals with two matters. It clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment.

Is this project part of the Memorandum of Understanding?

No. The MoU sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008. Click here for more information on the MoU. 

Related information

Project contacts

Jenny Lee
(Project Manager)
jlee@iasb.org