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IFRS 2 Share based payment

IFRS 2 Share-based Payment provides guidance on the accounting treatment of equity-settled and cash-settled share-based payments.

Published February 2004. Effective 1 January 2005.

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*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Synopsis

IFRS 2 requires share-based payments to be recognised in the financial statements at fair value, based on the value of the entity’s shares or the value of the goods and services received.

The scope of IFRS 2 includes employee share options, transactions in which shares or other equity instruments are issued in return for goods and services, and transactions where the payment amount is based the on the price of the entity’s shares.

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*Not EU endorsed as at 7 June 2017. Read more on EU Endorsement.

The following interpretation refers to IFRS 2

UK reduced disclosures

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Amendments to the standard

There are no amendments to IFRS 2 in order to comply with the Companies Act and related Regulations.

Disclosure exemptions

FRS 101 paragraph 8(a) states that a qualifying entity is exempt from most of the disclosure requirements of IFRS 2. The remaining disclosure requirements require a description of the schemes and details about options exercised in the year and options outstanding at the year-end.

This exemption applies:

  • For a subsidiary company to arrangements involving the equity instruments of another group entity;
  • For an ultimate parent to arrangements involving its own equity instruments provided that its separate financial statements are provided alongside the group consolidated financial statements.

Equivalent disclosures must be made in the consolidated financial statements of the group in which the entity is consolidated.
 
IFRS 2 paragraphs for which exemption is available: 45(b) and 46-52.

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This page was last updated 7 June 2017

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