GROUP POLL: Will your ESPP change after IFRS 2 becomes a reality in the US?
4 followers
0 Likes
Have you looked at the potential impact of IFRS 2 on your ESPP? Are you planning on changing any aspect of your ESPP as a result of changes in accounting between IFRS 2 and FAS 123R?
3 Replies
Reply
Subgroup Membership is required to post Replies
Join ECE - Equity Compensation Experts now
Suggested Posts
| Topic | Replies | Likes | Views | Participants | Last Reply |
|---|---|---|---|---|---|
| Tax Return Extensions | 1 | 0 | 295 | ||
| New CEP CE Course on Taxation | 0 | 0 | 217 | ||
| Tax Return Changes & Reporting Resources Related to Stock Comp | 0 | 0 | 260 |
Since I have not read this stuff could you save me some time and clue me in.
A couple of highlights of ESPP accounting under IFRS 2:
1. Unlike FAS 123R IFRS offers no safe harbour for ESPP that offer a discount of 5% or less, without a lookback. This means plans that were modified to be non-compensatory under FAS123R will now have a compensation expense.
2. THIS IS NEW FROM THIS SUMMER: Under IFRS 2 a company will need to take the full expense associated with an ESPP participant withdrawing from a purchase prior to the purchase date. (see summary below)
IFRIC issues Draft Interpretation D11 Changes in Contributions to Employee Share Purchase Plans
Share-based Payment if an employee ceases to contribute to an employee
share purchase plan (ESPP) and, as a consequence, is no longer able to
buy shares in the plan. The IFRIC concluded that the entity should
account for this event as a cancellation. Therefore, in accordance with
paragraph 28(a) of IFRS 2, the entity should recognise immediately the
amount that otherwise would have been recognised for services received
over the remainder of the vesting period.
D11 also clarifies how
an entity should apply IFRS 2 if an employee changes from one ESPP to
another. The IFRIC concluded that the entity should account for this
event in accordance with paragraph 28(c) of IFRS 2. For example, if the
entity identifies the equity instruments granted to the employee under
the new ESPP as replacements for the equity instruments granted to that
employee under the original ESPP, the entity should account for this
event as a modification of the original grant of equity instruments.
This certainly seems to be a matter of great concern, need some more clarity before we jump to the conclusion on this matter. Can somebody tell if this matter was taken up at the recent NASPP ?? I was there but can't recollect that this topic was covered there....may at GEO this summer...who knows.