IFRS 2: Amendments to IFRS 2 and IFRIC 11 : Group cash-settled share-based payment arrangements
- Published in the Official Journal
- Filippo Poli
In December 2007 the IASB issued an exposure draft ('ED') on the amendments to IFRS 2 Share-based Payment and IFRIC 11 Group and Treasury Share Transactions: Group Cash-settled Share-based Payment Transactions.
The proposals in the ED respond to requests for guidance on how an 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 the goods or services from its suppliers has no obligation to make the required shared-based cash payments. The proposed amendment to IFRIC 11 brings the above transactions into the scope of IFRIC 11 and specifies that the entity should measure the goods or services in accordance with the requirements for cash-settled share-based payment transactions. The ED makes clear that the proposals apply regardless of whether there is an arrangement for that entity to reimburse its parent or other group entity for the settlement of the obligation to the employees (or suppliers).
The amendments were published in 2009 with an effective date of 1 January 2010. The amendments were published in the Official Journal in March 2010.