International Financial Reporting Standard 2

• Issued: in 2004, followed by amendments
• Effective date: 1 January 2005
• What it does:
  • It deals with 3 types of share-based payment transactions:
    1. Equity-settled share-based payment transactions: an entity receives goods or services in exchange for equity instruments. For example, providing share options to employees as a part of their remuneration package.
    2. Cash-settled share-based payment transactions: an entity receives or acquires goods or services in exchange for liabilities to these suppliers. Liabilities are in amounts based on the price or value of entity’s shares or other equity instruments. For example, a company grants share appreciation rights to their employees, whereby employees will be entitled to future cash payment based on increase of company’s share price over some specified period of time.
    3. Share-based payment transactions with cash alternatives: an entity receives or acquires goods or services in exchange for either cash settlement or equity instrument.
• Separate attention is dedicated to share-based payment transactions among group entities.
• IFRS 2 prescribes how various transactions shall be measured and recognized, lists all necessary disclosures and provides application guidance on various situations.

• Summary of IFRS 2 Share-based Payment
• How to Calculate Fair Value for Share-based Payments under IFRS 2

• IFRS Kit - learn IFRS in 150+ videos, 150+ excel case studies, quizzes, certificates

CLICK HERE to see a complete catalogue of our courses.