Financial Reporting Standard Council  
  Financial Reporting Standard Council

 
 

FRSC Adopts Amendments to IFRS 2 on Group Cash-settled Share-based Payment Transactions

FRSC Adopts Amendments to IFRS 2 on Group Cash-settled Share-based Payment Transactions

The Financial Reporting Standards Council (FRSC) approved in its meeting in June the adoption of Amendments to IFRS 2: Group Cash-settled Share-based Payment Transactions, issued by the International Accounting Standards Board (IASB), as amendments to PFRS 2, Share-based Payments.

The amendments respond to requests the IASB received to clarify how an individual subsidiary in a group should account for some share-based payment arrangements in its own financial statements. In these arrangements, the subsidiary receives goods or services from employees or suppliers but its parent or another entity in the group must pay those suppliers.
The amendments clarify:
  • The scope of IFRS 2. An entity that receives goods or services in a share-based payment arrangement must account for those goods or services no matter which entity in the group settles the transaction, and regardless of whether the transaction is equity-settled or cashsettled.
  • The interaction of IFRS 2 and other standards. In IFRS 2, a ‘group’ has the same meaning as in IAS 27, Consolidated and Separate Financial Statements, that is, it includes only a parent and its subsidiaries. 
The amendments to IFRS 2 also incorporate guidance previously included in IFRIC 8, Scope of IFRS 2, and IFRIC 11, IFRS 2—Group and Treasury Share Transactions. As a result, the IASB has withdrawn IFRIC 8 and IFRIC 11.  Entities shall apply these amendments to all share-based payments within the scope of IFRS 2 for annual periods beginning on or after 1 January 2010. Earlier application is permitted.  The Amendments to IFRS 2: Group Cash-settled Share-based Payment Transactions will be forwarded to the Board of Accountancy and Professional Regulation Commission for approval.