Page 142 - SBR Integrated Workbook STUDENT S18-J19
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Chapter 10
2.5 Accounting after the vesting period
IFRS 2 states that no further adjustments to total equity should be made after the
vesting date.
Entities may, however, transfer balances within equity.
2.6 Modifications
An entity may modify the terms of a share option scheme during the vesting period.
Worked example
On 1 January 20X1 an entity grants options to its employees that will allow
them to buy its shares for $5 each on 31 December 20X3.
On 30 June 20X2, the entity’s share price fell to $3 per share. The share
options are now largely worthless.
As such, the entity decides to modify its share-based payment scheme to
enable the employees to buy its shares for $1 each.
If the modification increases the fair value of the equity instruments, then an extra
expense is recognised.
The expense is:
calculated as the difference between the fair value of the new arrangement and
the fair value of the original arrangement (the incremental fair value) at the date
of the modification
recognised in profit or loss over the remaining vesting period.
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