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IASB proposes guidance on group cash-settled share-based payment arrangements

13 December 2007


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The International Accounting Standards Board (IASB) today published for public comment an exposure draft of proposed amendments to IFRS 2 Share-based Payment and IFRIC 11 IFRS 2— Group and Treasury Share Transactions.

The proposals respond to requests for guidance on how a group entity that receives goods or services from its suppliers (including employees) should account for the following arrangements:

  • Arrangement 1—the entity’s suppliers will receive cash payments that are linked to the price of the equity instruments of the entity
  • Arrangement 2—the entity’s suppliers will receive cash payments that are linked to the price of the equity instruments of the entity’s parent.

Under either arrangement, the entity’s parent has an obligation to make the required cash payments to the entity’s suppliers. The entity itself does not have any obligation to make such payments.

The proposed amendment to IFRS 2 clarifies that IFRS 2 applies to arrangements such as those described above even if the entity that receives goods or services from its suppliers has no obligation to make the required share-based cash payments. The proposed amendment to IFRIC 11 specifies that the entity should measure the goods or services in accordance with the requirements for cash-settled share-based payment transactions.

The exposure draft of proposed amendments to IFRS 2 and IFRIC 11— Group Cash-settled Share-based Payment Transactions is available for eIFRS subscribers from today and will be freely available on the Website from 24 December 2007. It is open for comment until 17 March 2008.

Printed copies of the exposure draft Group Cash-settled Share-based Payment Transactions (ISBN 978-1-905590-53-7) will be available shortly, at £10 plus shipping, from the IASC Foundation Publications Department. Those wishing to subscribe to eIFRSs should visit the online shop at www.iasb.org or contact:

IASC Foundation Publications Department, 30 Cannon Street, London EC4M 6XH, United Kingdom.

Tel: +44 (0)20 7332 2730 Fax +44 (0)20 7332 2749

Email: publications@iasb.org Web: www.iasb.org

Press enquiries:

Mark Byatt, Director of Corporate Communications, IASB, telephone: +44 (0)20 7246 6472, email: mbyatt@iasb.org

Sonja Horn, Communications Adviser, IASB, telephone: +44 (0)20 7246 6463, email: shorn@iasb.org

Technical enquiries:

Elizabeth Hickey, Director of Technical Activities, IASB, telephone:+44 (0)20 7246 6458, email: ehickey@iasb.org

Candy Fong, Project Manager, IASB telephone:+44 (0)20 7246 6918, email: cfong@iasb.org