Standard setter offers olive branch on FRS20

The Accounting Standards Board
decided to temper the standard on share-based payments in its Financial
Reporting Standard for Smaller Entities update. Chairman Ian Mackintosh, said:
‘The Board agreed major simplification was appropriate for FRS20, particularly
for equity-settled arrangements where better financial reporting should be
secured through a disclosure-only approach.’

The body will now take the disclosure-only approach for equity-settled
arrangements on small companies’ share-based payments for accounting periods on
or after 1 January 2007.

In making the reform the ASB considered responses to an exposure draft for an
amendment to proposals issued in April 2006.

The ASB said replies to the exposure draft showed that share-based payments
were not widespread in the SME sector and that the requirements of FRS20 were
overly complex. Respondents also felt implemention would be costly with little
benefit in terms of improved financial reporting.

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