AASB Releases Interpretation For AASB 2 – Share Based Payments

The Australian Accounting Standards Board (AASB) released Interpretation 11, applicable to annual reporting periods beginning on or after 1 March 2007. The interpretation addresses whether certain types of share-based payment transactions with employees (or other suppliers of goods and services) should be accounted for as equity-settled or as cash-settled transactions under AASB 2.

For example, the interpretation clarifies that when an entity’s employees are granted rights to the entity’s equity instruments either by the entity or its shareholders, the transactions are accounted for as equity-settled transactions. This is so whether the entity chooses to or is required to buy the equity instruments from another party or the shareholders provide the necessary equity instruments.

The interpretation also specifies the accounting in a subsidiary’s financial statements for share-based payment arrangements involving equity instruments of the parent.

Details can be found by clicking here.

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