IFRIC issues Interpretation on share-based payment

12 January 2006

The International Financial Reporting Interpretations Committee (IFRIC) issued an Interpretation—IFRIC 8 Scope of IFRS 2. The Interpretation clarifies that the accounting standard IFRS 2 Share-based Payment applies to arrangements where an entity makes share based payments for apparently nil or inadequate consideration.

IFRIC 8 explains that, if the identifiable consideration given appears to be less than the fair value of the equity instruments granted or liability incurred, this situation typically indicates that other consideration has been or will be received. IFRS 2 therefore applies.

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