Share-based payments under IFRS 2/FRS 20 - Mazars - United Kingdom
Share-based payments under IFRS 2/FRS 20
FRS 20 ‘Share-based Payment’ and its identically worded international equivalent, IFRS 2, have dramatically changed the way companies account for share options granted to employees.
Both Standards require a company to charge the profit and loss account with the fair value of share options granted to employees, and therefore this will have a significant impact on the results of many companies. It means companies will need to obtain a formal valuation of the options granted to employees. Developments in these Standards over recent years have also meant that the accounting and financial reporting requirements, particular in relation to group situations and modifications to share schemes, have become ever-more complex.
We can help you to understand the accounting implications of the Standards and provide share option valuations.
The valuation service we provide reflects factors specific to employee share schemes, such as market performance conditions (modelled using Monte Carlo simulation techniques), service and vesting conditions and sub-optimal performance (modelled using a Binomial Model), and is designed to withstand the rigorous scrutiny of auditors, investors and regulators.
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FRS 20 (IFRS2): how will it impact on you?
To allow for the effects of share-based payments on their profit and loss accounts, companies must now obtain formal valuation of those options at the date of grant.
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- Copyright 2012 - Mazars - United Kingdom
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- Copyright 2012 - Mazars - United Kingdom
