The Financial Reporting Standards Council (FRSC) has approved the adoption of Amendments to IFRS 2, Share-based Payment – Vesting Conditions and Cancellations. The Amendments, which will become part of PFRS 2, Share-based Payment, deal with two matters. They clarify that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. They also specify that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment.

The issues addressed in the Amendments were first published in an exposure draft of proposed amendments to IFRS 2, Vesting Conditions and Cancellations in February 2006 (which was exposed for comment in the Philippines in February 2006). In response to comments received during the consultation process, the IASB decided to add to the guidance on the implementation of IFRS 2 on the determination of whether a condition is a vesting condition and on the accounting treatment for conditions that are not vesting conditions.

The Amendments will apply for annual periods beginning on or after January 1, 2009, with earlier application permitted.

The Amendments to PFRS 2 have been forwarded to the Board of Accountancy and Professional Regulation Commission for approval.