Share Based Payment – Accounting Standards Reinterpreted

The Australian Accounting Standards Board has released a new draft interpretation of AASB 2’s treatment of group and treasury share transactions. The draft interpretation mainly adds clarity to the treatment of on-market share purchases. This 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. More information is available at HERE.

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