IFRS 2/FRS 20 specifies the accounting treatment to be adopted (including the disclosures to be provided) by entities making share-based payments. In particular, it requires entities to recognise an expense, measured at fair value, in respect of the share-based payments they make. FRS 20 has been mandatory for accounting periods beginning on or after 1 January 2005 for listed entities and 1 January 2006 for unlisted entities (other than those applying the Financial Reporting Standard for Smaller Entities (FRSSE)). IFRS 2 has allowed delayed implementation for AIM listed companies which have to comply for accounting periods commencing on or after 1 January 2007. (IFRS 2, like FRS 20, applied to fully listed companies from 1 January 2005).
Apart from the delayed implementation for unlisted entities and the exemption for entities applying the FRSSE, FRS 20 is identical to the IASB’s IFRS 2 ‘Share-based Payment’ and therefore has the effect of implementing that IFRS in the UK.
We can provide you with our formal professional opinion as to the value of these benefits.
We will work closely with your people in defining, and then gathering, the relevant information.
We will liaise with your auditors to address any concerns or queries raised by them to ensure that their requirement for a credible, well-supported and well documented conclusion of value is met.
Alternatively, we can provide training in how to value your company’s share-based payments.
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Valuation provisions of IFRS 2 / FRS 20
Case study of a valuation for an employee share scheme