EFRAG: Endorsement Advice on amendments to IFRS 2

14 December 2016

EFRAG has completed its due process regarding Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) and has submitted its Endorsement Advice Letter to the EC.

In June 2016, the IASB issued Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) ('the Amendments') which were initially issued as an exposure draft ED/2014/5 in November 2014.

The Amendments provide guidance on three issues reported by the IFRS Interpretations Committee regarding:

• the effects of vesting conditions on the measurement of a cash-settled share-based payment;
• the classification of share-based payment transactions with net settlement features for withholding tax obligations; and
• the accounting for a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.

The Amendments become effective for annual periods beginning on or after 1 January 2018, with earlier application permitted. EFRAG has submitted its Endorsement Advice relating to the Amendments for use in the European Union and European Economic Area. EFRAG assesses that the Amendments meet all technical endorsement criteria of the IAS Regulation and are conducive to the European public good. It therefore recommends their endorsement. EFRAG's recommendation is explained in the letter to the European Commission and the accompanying appendices. 

Full press release

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