NEW YORK-The International Accounting Standards Board (IASB) 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 freely available on the Web site from Dec. 24, 2007. It is open for comment until Mar. 17, 2008
For more information please visit the following website: www.iasb.org