In late February 2007 AASB Interpretation 11 AASB 2 – Group and Treasury Share Transactions (Interpretation 11) was issued. Interpretation 11:
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clarifies whether certain share-based payment transactions with employees (or other suppliers of goods and services) should be classified as equity-settled or cash-settled
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specifies the accounting in a subsidiary’s financial statements for share-based payment arrangements involving equity instruments of the parent.
Interpretation 11 is effective for annual reporting periods beginning on or after 1 March 2007. Earlier application is however permitted.
A number of issues may arise when accounting for share-based payment arrangements in accordance with Interpretation 11. This Accounting alert highlights the following issues which should be considered including: