Wiley International Trends in Financial Reporting under IFRS: Including Comparisons with US GAAP, Chinese GAAP, and Indian GAAP

CHAPTER 26

SHARE-BASED PAYMENTS (IFRS 2)

1. OBJECTIVE

1.1 This Standard prescribes the method of measuring and disclosing share-based compensation and recording such amounts as expense over the employees’ service years.

2. SYNOPSIS OF THE STANDARD

This summary of the Standard specifies the financial reporting required by an entity when it undertakes a share-based payment transaction.

2.1 This Standard covers the shares or options issued to employees in exchange for services and all exchange of shares or options for goods or services received from nonemployees.

2.2 The Standard does not cover share-based payments that are part of a business combination. It also does not cover acquisition of treasury shares or the issuance of shares in exchange for financial instruments, which are addressed by IAS 32, Financial Instruments: Presentation, or by IAS 39, Financial Instruments: Recognition and Measurement.

2.2.1 A share-based payment transaction is a transaction in which the entity acquires goods or services by incurring a liability to transfer cash or other assets to the provider of those goods or services for amounts that are tied to the value of the entity’s own shares.

2.3 This Standard addresses both equity-settled share-based payment transactions and cash-settled share-based payment transactions.

2.3.1 Equity-settled share-based payment transactions are transactions where the entity receives goods and services in exchange for the equity instruments it has issued.

2.3.2 Cash-settled ...