Comparison between U.S. GAAP and International ... - Grant Thornton

Comparison between U.S. GAAP and International Financial Reporting Standards 89
IFRS
• Grant date – the grant date is the date on which the
fair value of the employee awards is measured. It is
the date on which the entity and the employee have
a shared understanding of the terms and conditions
of the arrangement (IFRS 2, Appendix A)
U.S. GAAP
• Grant date – similar to IFRS, the grant date is the
date on which the fair value of the employee awards
is measured. Unlike IFRS, it is the date the entity and
the employee have a shared understanding of the
terms and conditions of the arrangement and the
employee is affected by subsequent changes in the
share price (ASC Master Glossary, “Grant Date”).
• Intrinsic value – in rare cases in which the fair value
of equity instruments cannot be reliably determined
at the measurement date, the intrinsic value shall
be used with subsequent remeasurement, at the
end of each reporting period, until final settlement
(IFRS 2.24)
Cash-settled transactions with employees
Goods or services acquired shall be measured at the
fair value of the liability. Until the liability is settled, the
fair value shall be remeasured at the end of each
reporting period (IFRS 2.30-.33).
Equity-settled transactions with nonemployees:
• Fair value – goods or services received shall be
measured at the fair value of the goods or services
received. There is a rebuttable presumption that the
fair value of the goods or services received can be
estimated reliably. If fair value of the goods or
services received cannot be estimated reliably,
then their fair value shall be measured by reference
to the fair value of the equity instruments granted
(IFRS 2.13).
• Intrinsic value – similar to IFRS, in rare cases in
which the fair value of equity instruments cannot be
reliably determined at the measurement date, the
intrinsic value shall be used with subsequent
remeasurement until final settlement
(ASC 718-10-30-4 and 718-10-30-21 and 30-22)
• Calculated value – unlike IFRS, nonpublic companies
may measure awards based on a calculated value
(using historical volatility of an industry index) if the
company is unable to reasonably estimate its
expected volatility (ASC 718-10-30-4 and 30-20)
Liability-classified transactions with employees
Share-based payment awards classified as liabilities shall
be accounted for under ASC 718’s measurement and
recognition provisions for liabilities, which require variable
accounting until the award is settled or expires
unexercised (ASC 718-30-35-1). ASC 718-10-25-6
through 25-19 provides guidance on whether share-based
payment awards shall be classified as liabilities.
Unlike IFRS, U.S. GAAP permits nonpublic entities to
make an accounting policy election to use intrinsic value
for liability classified awards (ASC 718-30-30-2).
Equity-settled transactions with nonemployees:
• Fair value – unlike IFRS, the transaction shall be
measured based on the fair value of the goods or
services received or the fair value of the equity
instruments issued, whichever is more reliably
measurable (ASC 505-50-30-6). Under IFRS, there is
a presumption that goods or services received can be
reliably measured.
• Measurement date – the date the goods or services
are received (IFRS 2, Appendix A)
• Measurement date – unlike IFRS, the measurement
date for awards to nonemployees is generally the
earlier of the date at which the counterparty’s
performance is complete or the date at which a
commitment for performance by the counterparty to
earn the equity instruments is reached
(ASC 505-50-30-11 through 30-14)
© 2011 Grant Thornton LLP
All rights reserved
U.S. member firm of Grant Thornton International Ltd