Our Recommendations :-
Follow FB Page Facebook


Treatment Of Vesting Conditions IFRS 2

Treatment Of Vesting Conditions IFRS 2 :  IFRS 2 describes vesting conditions as including service conditions and performance conditions but is silent on whether other features of a share-based payment transaction are vesting conditions. IFRS 2 also specifies the accounting treatment when an entity cancels a grant of equity instruments. However, it does not state how cancellations by a party other than the entity should be accounted for.

The Board’s initial objective in this project was to amend IFRS 2 Share-based Payment to clarify the definition of vesting conditions and provide guidance on the accounting treatment of cancellations by parties other than the entity.

In light of the comment letters received the Board has also agreed to include clarification of the definition of vesting conditions and the treatment of all non-vesting conditions. In addition, the Board agreed to include some additional Implementation Guidance to clarify the requirements.

Treatment Of Vesting Conditions IFRS 2

Treatment Of Vesting Conditions IFRS 2 : A grant of equity instruments might be conditional upon satisfying specified vesting conditions. For example, a grant of shares or share options to an employee is typically conditional on the employee remaining in the entity’s employ for a specified period of time. There might be performance conditions that must be satisfied, such as the entity achieving a specified growth in profit or a specified increase in the entity’s share price. Vesting conditions, other than market conditions, shall not be taken into account when estimating the fair value of the shares or share options at the measurement date. Instead, vesting conditions shall be taken into account by adjusting the number of equity
instruments included in the measurement of the transaction amount so that, ultimately, the amount recognised for goods or services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest. Hence, on a cumulative basis, no amount is recognised for goods or services received if the equity instruments granted do not vest because of failure to satisfy a vesting condition, eg the counterparty fails to complete a specified service period, or a performance
condition is not satisfied, subject to the requirements.

Treatment Of Vesting Conditions IFRS 2

Preparing for IFRS? - Must read below
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better. Watch demo videos below -

Treatment Of Vesting Conditions IFRS 2 : The entity shall recognise an amount for the goods or services received during the vesting period based on the best available estimate of the number of equity instruments expected to vest and shall revise that estimate, if necessary, if subsequent information indicates that the number of equity instruments expected to vest differs from previous estimates. On vesting date, the entity shall revise the estimate to equal the number of equity instruments .

Market conditions, such as a target share price upon which vesting (or exercisability) is conditioned, shall be taken into account when estimating the fair value of the equity instruments granted. Therefore, for grants of equity instruments with market conditions, the entity shall recognise the goods or services received from a counterparty who satisfies all other vesting conditions (eg services received from an employee who remains in service for the specified period of service), irrespective of whether that market condition is satisfied.

Treatment Of Vesting Conditions IFRS 2

Treatment Of Vesting Conditions IFRS 2 :  IFRS 2 Share-based Payment requires an entity to recognise share-based payment transactions (such as granted shares, share options, or share appreciation rights) in its financial statements, including transactions with employees or other parties to be settled in cash, other assets, or equity instruments of the entity. Specific requirements are included for equity-settled and cash-settled share-based payment transactions, as well as those where the entity or supplier has a choice of cash or equity instruments.

If the equity instruments granted vest immediately, the counterparty is not required to complete a specified period of service before becoming unconditionally entitled to those equity instruments. In the absence of evidence to the contrary, the entity shall presume that services rendered by the counter party as consideration for the equity instruments have been received. In this case, on grant date the entity shall recognise the services received in full, with a corresponding increase in equity.

If the equity instruments granted do not vest until the counterparty completes a specified period of service, the entity shall presume that the services to be rendered by the counterparty as consideration for those equity instruments will be received in the future, during the vesting period. The entity shall account for those services as they are rendered by the counterparty during the vesting period, with a corresponding increase in equity. For example:
(a) if an employee is granted share options conditional upon completing three years’ service, then the entity shall presume that the services to be rendered by the employee as consideration for the share options will be
received in the future, over that three-year vesting period.
(b) if an employee is granted share options conditional upon the achievement of a performance condition and remaining in the entity’s employ until that performance condition is satisfied, and the length of the vesting period varies depending on when that performance condition is satisfied, the entity shall presume that the services to be rendered by the employee as consideration for the share options will be received in the future, over the expected vesting period. The entity shall estimate the length of the expected vesting period at grant date, based on the most likely outcome of the performance condition. If the performance condition is a market condition, the estimate of the length of the expected vesting period shall be consistent with the assumptions used in estimating the fair value of the options granted, and shall not be subsequently revised. If the performance condition is not a market condition, the entity shall revise its estimate of the length of the vesting period, if necessary, if subsequent information indicates that the length of the vesting period differs from previous estimates.

IFRS Best Books :

Best Books

VIEW

Beginner’s Guide To Ind As & Ifrs

VIEW

Ifrs 2016

VIEW

Practical Guide To Ind As And Ifrs By Ca. Kamal Garg

VIEW

Ifrs For Smes

VIEW

International Financial Reporting Standards (Set Of 2 Volumes)

VIEW

International Financial Reporting Standards (IFRS) & Indian Accounting Practices

VIEW

IFRS Free Books :

 FREE BOOKS

Download

Ind AS Super summary of IFRS Notes

Download

List Of Indian As Convergence With Ifrs

Download

Comparison of IFRS as applicable on 1st April 2011 with Ind AS placed at MCA’s website

Download

Module 4.As,Ifrs,Gaap

Download

INTRODUCTION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Download

Diploma in International Financial Reporting study material

Download

IFRS Financial instruments

Download

IFRS pocket guide 2016

Download

IFRS Question papers :

Preparing for IFRS? - Must read below
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better. Watch demo videos below -

Question papers

Download

IFRS Exam Questions Paper set  1

Download

IFRS Exam Questions Paper set 2

Download

IFRS Exam Questions Paper set 3

Download

IFRS Exam Questions Paper 4

Download

IFRS Exam Questions Paper 5

Download

IFRS Exam Questions Paper 6

Download

IFRS Exam Questions Paper 7

Download

IFRS Best Books :

Recommended Read View
IFRS registration procedure IFRS Registration Procedure For June 2017 Exam
IFRS registration form IFRS Registration Form And Other IFRS Information
Dip IFRS Syllabus And Study Guide For 2017 Exam Dip IFRS Syllabus And Study Guide For 2017 Exam
IFRS course material IFRS Course Material For 2017 Exam
IFRS notes IFRS Notes
IFRS FREE BOOKS IFRS FREE BOOKS
IFRS – Purpose and application of the standard IFRS Purpose And Application Of The Standard
IFRS – The structure of the Cash Flow Statement IFRS – The structure of the Cash Flow Statement

Treatment Of Vesting Conditions IFRS 2

Cakart.in provides India’s top IFRS faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get IFRS Video classes from www.cakart.in  to do a great preparation for primary Student.

Watch IFRS sample video lectures Here
Watch  IFRS  sample lecture books  Here
Watch IFRS free downloads  Here

https://s3-ap-southeast-1.amazonaws.com/static.cakart.in/avatar.png
About Author: cakart

Leave a Reply

Your email address will not be published. Required fields are marked *

Chat with a counsellor
SIGN UP