Insiders also insist that those looking for exemptions in the forthcoming standard will be left disappointed.
Originally due to be published by the International Accounting Standards Board before the end of the year, the final version of the standard on share-based payment is now unlikely to be released until the end of January, or possibly even February.
The hold-up was caused after board members at the IASB’s last London meeting in July highlighted problems. ‘We may have lost a month at last month’s meeting,’ admitted an IASB insider. ‘The board acknowledged there were inconsistencies between the exposure draft (on share-based payments) and IAS32 (financial instruments) that needed to be worked out, but some members raised additional concerns that weren’t expected and forced us to rethink things.’
These issues included problems establishing a measurement date for first transactions with non-employees, which can be treated as liabilities in the other financial instruments standard IAS39, but as equity in the share options standard. ‘These are second-class issues,’ said the IASB source. ‘They need to be addressed, but won’t affect the core principles.’
The new standard will compel companies to treat shares as a cost on the balance sheet. The extra work required to resolve the current problems will push the release of the final standard into the new year, with 31 January now thought to be the most realistic date. It had originally been hoped it would be available to companies in December.
Opponents of the standard, and those looking to win exemptions for broad-based employee share option schemes, such as Proshare and the International Employee Stock Option Coalition, also look set to lose out with the board resolute on this issue.
‘I don’t sense any desire from the board to reach a different conclusion on exemptions,’ said the insider. ‘Nothing presented so far has forced a change of thinking on the matter.’
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