International GAAP® 2019: Generally Accepted Accounting Practice under International Financial Reporting Standards
Page 975
7.3.4
7.4.1
share splits and consolidations, Ch. 30, 7.8
surrender of award by employee, Ch. 30, 7.4.1.B
two awards running ‘in parallel’, Ch. 30, 7.7
termination of employment by entity, Ch. 30, 7.4.1.A
valuation requirements when an award is modified,
cancellation and modification, distinction between,
Ch. 30, 7.2
Ch. 30, 7.4.2
non-vesting conditions, Ch. 30, 6.4
replacement awards, Ch. 30, 7.4.4
awards with no conditions other than non-vesting
designation, Ch. 30, 7.4.4.A
conditions, Ch. 30, 6.4.1
incremental fair value of, Ch. 30, 7.4.4.B
awards with non-vesting conditions and variable vesting
replacement of vested awards, Ch. 30, 7.4.4.C
periods, Ch. 30, 6.4.2
valuation requirements when an award is cancelled or
failure to meet non-vesting conditions, Ch. 30, 6.4.3
settled, Ch. 30, 7.2
reload features, Ch. 30, 5.5.1, 8.9
cost of awards, Ch. 30, 5
termination of employment
determining the fair value of equity instruments, Ch. 30,
by entity, Ch. 30, 7.4.1.A
5.5, 8
replacement and ex gratia awards, Ch. 30, 7.5
reload features, Ch. 30, 5.5.1, 8.9
transactions with employees, Ch. 30, 5.2
grant date, Ch. 30, 5.3
basis of measurement, Ch. 30, 5.2.2
overview, Ch. 30, 5.1
employee definition, Ch. 30, 5.2.1
transactions with employees, Ch. 30, 5.2
transactions with non-employees, Ch. 30, 5.4
transactions with non-employees, Ch. 30, 5.4
effect of change of status from employee to non-employee
credit entry, Ch. 30, 4.2
(or vice versa), Ch. 30, 5.4.1
entity’s plans for future modification/replacement of award,
transactions with equity and cash alternatives, Ch. 30, 10.1,
Ch. 30, 7.6
10.2, 10.3
grant date, Ch. 30, 5.3
awards requiring cash settlement in specific circumstances
market conditions, Ch. 30, 6.3
(awards with contingent cash settlement), Ch. 30, 10.3
accounting treatment summary, Ch. 30, 6.3.2
change in manner of settlement where award is
awards with a condition linked to flotation price, Ch. 30,
contingent on future events outside the control of
6.3.8.A
the entity and the counterparty, Ch. 30, 10.3.4
based on the market value of a subsidiary or business unit,
cash settlement on a change of control, Ch. 30, 10.3.3
Ch. 30, 6.3.8
IASB discussion, Ch. 30, 10.3.5
definition, Ch. 30, 6.3.1
treat as cash-settled if contingency is outside entity’s
hybrid/interdependent market conditions and non-market
control, Ch. 30, 10.3.1
vesting conditions, Ch. 30, 6.3.7
contingency outside entity’s control and probable,
independent market conditions and non-market vesting
Ch. 30, 10.3.2
conditions, Ch. 30, 6.3.6
cash settlement alternative not based on share price/value,
market conditions and known vesting periods, Ch. 30,
Ch. 30, 10.4
6.3.3
transactions where the counterparty has choice of settlement,
multiple outcomes depending on market conditions,
Ch. 30, 10.1
Ch. 30, 6.3.5
accounting treatment, during vesting period, Ch. 30,
transactions with variable vesting periods due to market
10.1.3.A
conditions, Ch. 30, 6.3.4
accounting treatment, settlement, Ch. 30, 10.1.3. B
market purchases of own equity, Ch. 30, 9.2.2, 9.2.3
‘backstop’ cash settlement rights, Ch. 30, 10.1.5
modification, Ch. 30, 7.3
cash-settlement alternative for employee introduced after
altering vesting period, Ch. 30, 7.3.3
grant date, Ch. 30, 10.1.4
decreasing the value of an award, Ch. 30, 7.3.2
convertible bonds issued to acquire goods/services, Ch. 30,
additional/more onerous non-market vesting
10.1.6
conditions, Ch. 30, 7.3.2.C
transactions in which the fair value is measured directly,
decrease in fair value of equity instruments granted,
Ch. 30, 10.1.1
Ch. 30, 7.3.2.A
transactions in which the fair value is measured indirectly,
decrease in number of equity instruments granted,
Ch. 30, 10.1.2
Ch. 30, 7.3.2.B
transactions where the entity has choice of settlement, Ch. 30,
from equity-settled to cash-settled, Ch. 30, 7.3.5
10.2
increasing the value of an award, Ch. 30, 7.3.1
change in entity’s settlement policy/intention leading to
increase in fair value of equity instruments granted,
change in classification of award after grant date,
Ch. 30, 7.3.1.A
Ch. 30, 10.2.3
increase in number of equity instruments granted,
transactions treated as cash-settled, Ch. 30, 10.2.1
Ch. 30, 7.3.1.B
economic compulsion for cash settlement, Ch. 30,
removal/mitigation of non-market vesting conditions,
10.2.1.A
Ch. 30, 7.3.1.C
transactions treated as equity-settled, Ch. 30, 10.2.2
124 Index
Equity-settled share-based payment transactions —contd
Euro, introduction of, Ch. 15, 8
valuation, Ch. 30, 8
European Commission, Ch. 1, 1, 2.2–2.3, 2.5, 4.2.1
awards of equity instruments to a fixed monetary value,
European Embedded Values (EEV), Ch. 51, 1.4.3
Ch. 30, 8.10
European Financial Reporting Advisory Group (EFRAG), Ch. 1,
awards other than options, Ch. 30, 8.7
4.2.1
non-recourse loans, Ch. 30, 8.7.2
performance rights, Ch. 30, 8.7.4
European Securities and Markets Authority (ESMA), Ch. 1,
share appreciation rights (SAR), Ch. 30, 8.7.3
4.2.1, 5
shares, Ch. 30, 8.7.1
European Union
awards whose fair value cannot be measured reliably,
adoption of IRFS in, Ch. 1, 4.2.1; Ch. 40, 2
Ch. 30, 8.8
EU directive on WE&EE (IFRIC 6), Ch. 27, 6.7
intrinsic value method, Ch. 30, 8.8.1
EU ‘top up’ for financial conglomerates, Ch. 51, 10.1.6
modification, cancellation and settlement, Ch. 30, 8.8.2
introduction of the euro, Ch. 15, 8
awards with reload features, Ch. 30, 8.9
tax implications of UK withdrawal from the, Ch. 29, 5.1.4
capital structure effects and dilution, Ch. 30, 8.6
Events after the reporting period, Ch. 34, 1–3. See also IAS 10
options, Ch. 30, 8.2
adjusting events, Ch. 34, 2.1.2
call options, overview, Ch. 30, 8.2.1
treatment of, Ch. 34, 2.2
call options, valuation, Ch. 30, 8.2.2
extractive industries, Ch. 39, 20
factors specific to employee share options, Ch. 30, 8.2.3
business combinations-application of the acquisition
option-pricing model, selection of, Ch. 30, 8.3
method, Ch. 39, 20.2
binomial model, Ch. 30, 8.3.2
/> completion of E&E activity after, Ch. 39, 20.3
Black-Scholes-Merton formula, Ch. 30, 8.3.1
reserves proven after the reporting period, Ch. 39, 20.1
Monte Carlo Simulation, Ch. 30, 8.3.3
impairment, Ch.20, 7.1.8
option-pricing models, adapting for share-based payment,
non-adjusting events, Ch. 34, 2.1.3
Ch. 30, 8.4
treatment of, Ch. 34, 2.3
non-transferability, Ch. 30, 8.4.1
practical issues, Ch. 34, 3
vesting and non-vesting conditions, treatment of,
changes to estimates of uncertain tax treatments, Ch. 34,
Ch. 30, 8.4.2
3.6
option-pricing model, selecting appropriate assumptions,
discovery of fraud after the reporting period, Ch. 34, 3.5
Ch. 30, 8.5
insolvency of a debtor, Ch. 34, 3.3
exercise and termination behaviour, Ch. 30, 8.5.2
percentage of completion estimates, Ch. 34, 3.2
expected dividends, Ch. 30, 8.5.4
valuation of inventory, Ch. 34, 3.1
expected term of the option, Ch. 30, 8.5.1
valuation of investment property at fair value and tenant
expected volatility of share price, Ch. 30, 8.5.3
insolvency, Ch. 34, 3.4
risk-free interest rate, Ch. 30, 8.5.5
Evidence of power over an investee, Ch. 6, 4.5
vesting conditions other than market conditions, Ch. 30, 6.2
Ex gratia share-based payment award, Ch. 30, 7.5
‘graded’ vesting, Ch. 30, 6.2.2
Exceptional cash flows, Ch. 36, 5.1
service conditions, Ch. 30, 6.2.1
Exchangeable debt instruments, Ch. 42, 5.1.8
variable exercise price, Ch. 30, 6.2.5
variable number of equity instruments, Ch. 30, 6.2.4
Exchanges of assets, Ch. 17, 4.7; Ch. 18, 4.4
variable vesting periods, Ch. 30, 6.2.3
commercial substance, Ch. 17, 4.7.2; Ch. 18, 4.4.1
measurement of assets exchanged, Ch. 17, 4.7.1
Equity transactions
reliably measurable, Ch. 18, 4.4.2
in an associate’s/joint venture’s financial statements, Ch. 11,
7.11
Executory contract, Ch. 27, 2.2.1.A
dividends/other forms of distributions, Ch. 11, 7.11.1
Existing rights, investee
effects of changes in parent/non-controlling interests in
budget approval rights, Ch. 6, 4.2.2.C
subsidiaries, Ch. 11, 7.11.4
evaluation whether rights are protective, Ch. 6, 4.2.2
equity-settled share-based payment transactions, Ch. 11,
evaluation whether rights are substantive, Ch. 6, 4.2.1
7.11.3
franchises, Ch. 6, 4.2.2.B
issues of equity instruments, Ch. 11, 7.11.2
incentives to obtain power, Ch. 6, 4.2.3
tax effects of, Ch. 43, 8.2
independent directors, Ch. 6, 4.2.2.D
transaction costs of, Ch. 43, 8.1
veto rights, Ch. 6, 4.2.2.A
Errors, prior period
Expected credit losses (ECLs), Ch. 47, 14. See also Credit risk
correction of, Ch. 3, 4.6
approaches, Ch. 47, 3
disclosure of, Ch. 3, 5.3
general approach, Ch. 47, 3.1
impracticability of restatement, Ch. 3, 4.7.2
purchased/originated credit-impaired financial assets,
Estimates. See Accounting Estimates
Ch. 47, 3.3
simplified approach, Ch. 47, 3.2
Estimation uncertainty, Ch. 3, 5.2
background and history of impairment project, Ch. 47, 1.1
disclosures of, Ch. 3, 5.2
calculations, Ch. 47, 7
sources of, Ch. 3, 5.2.1
Basel guidance on accounting for ECLs, Ch. 47, 7.1
Index
125
date of derecognition and date of initial recognition,
allowance for financial assets measured at amortised cost,
Ch. 47, 7.3.1
contract assets and lease receivables, Ch. 47, 14.1
Global Public Policy Committee (GPPC) guidance,
presentation of the gross carrying amount and ECL
Ch. 47, 7.2
allowance for credit-impaired assets, Ch. 47, 14.1.2
interaction between expected credit losses calculations and
write-off, Ch. 47, 14.1.1
fair value hedge accounting, Ch. 47, 7.5
provisions for loan commitments and financial guarantee
interaction between the initial measurement of debt
contracts, Ch. 47, 14.2
instruments acquired in a business combination and
revolving credit facilities, Ch. 47, 12
the impairment model of IFRS 9, Ch. 47, 7.4
determining a significant increase in credit risk, Ch. 47,
measurement dates of ECLs, Ch. 47, 7.3
12.5
trade date and settlement date accounting, Ch. 47, 7.3.2
exposure at default, Ch. 47, 12.3
disclosures, Ch. 47, 15
period over which to measure ECLs, Ch. 47, 12.2
financial assets measured at fair value through other
scope of the exception, Ch. 47, 12.1
comprehensive income, Ch. 47, 9
time value of money, Ch. 47, 12.4
accounting treatment for debt instruments measured at fair
scope of IFRS 9 impairment requirements, Ch. 47, 2
value through other comprehensive income, Ch. 47, 9.1
trade receivables, contract assets and lease receivables, 47, 10
interaction between foreign currency translation, fair value
lease receivables, Ch. 47, 10.2
hedge accounting and impairment, Ch. 47, 9.2
trade receivables and contract assets, Ch. 47, 10.1
financial guarantee contracts, Ch. 47, 11
Expenses analysis, Ch. 3, 3.2.3
Global Public Policy Committee guidance, Ch. 47, 7.2
by function, Ch. 3, 3.2.3.B, 3.2.4.A
IFRS Transition Resource Group for Impairment of Financial
by nature, Ch. 3, 3.2.3.A
Instruments (ITG) and IASB webcasts, Ch. 47, 1.5
Exploration and evaluation (E&E) assets. See also IFRS 6
impairment requirements (IFRS 9), Ch. 47, 1.2
asset swaps, Ch. 39, 6.3.1
key changes from the IAS 39 requirements and the main
carried interest in E&E phase, Ch. 39, 6.1.2
implications of these changes, Ch. 47, 1.3
exchanges of E&E assets for other types of assets, Ch. 39,
key differences from the FASB’s requirements, Ch. 47, 1.4
6.3.3
intercompany loans, Ch. 47, 13
farm-in arrangements, Ch. 39, 6.2
loan commitments, Ch. 47, 11
impairment of, Ch. 39, 3.5
measurement, Ch. 47, 5
additional considerations if E&E assets are impaired,
12-month expected credit losses, Ch. 47, 5.3
Ch. 39, 3.5.5
definition of default, Ch. 47, 5.1
cash-generating units comprising successful and
expected life vs. contractual period, Ch. 47, 5.5
unsuccessful E&E projects, Ch. 39, 3.5.3
lifetime expected credit losses, Ch. 47, 5.2
impairment testing ‘triggers,’ Ch. 39, 3.5.1
losses expected in the event of default, Ch. 47, 5.8
income statement treatment of E&E write downs, Ch. 39,
cash flows from the sale of a defaulted loan, Ch. 47,
3.5.6
5.8.2
order of impairment testing, Ch. 39, 3.5.4
credit enhancement
s: collateral and financial
reversal of impairment losses, Ch. 39, 3.5.7
guarantees, Ch. 47, 5.8.1
specifying the level at which E&E assets are assessed for
treatment of collection costs paid to an external debt
impairment, Ch. 39, 3.5.2
collection agency, Ch. 47, 5.8.3
measurement of, Ch. 39, 3.3
probability of default (PD) and loss rate approaches,
capitalisation of borrowing costs in the E&E phase,
Ch. 47, 5.4
Ch. 39, 3.3.2
loss rate approach, Ch. 47, 5.4.2
types of expenditure in the E&E phase, Ch. 39, 3.3.1
probability of default approach, Ch. 47, 5.4.1
reclassification of, Ch. 39, 3.4.1
probability-weighted outcome, Ch. 47, 5.6
recognition of, Ch. 39, 3.2
reasonable and supportable information, Ch. 47, 5.9
area-of-interest method, Ch. 39, 3.2.5
information about past events, current conditions and
changes in accounting policies, Ch. 39, 3.2.6
forecasts of future economic conditions, Ch. 47,
developing an accounting policy under IFRS 6, Ch. 39,
5.9.3
3.2.1
sources of information, Ch. 47, 5.9.2
full cost method, Ch. 39, 3.2.4
undue cost/effort, Ch. 47, 5.9.1
options for an exploration and evaluation policy, Ch. 39,
time value of money, Ch. 47, 12.4
3.2.2
modified financial assets, accounting treatment, Ch. 47, 8.1
successful efforts method, Ch. 39, 3.2.3
if assets are derecognised, Ch. 47, 8.1
Exposure Drafts (EDs), Ch. 19, 3.3.1; Ch. 51, 7.2.4
if assets are not derecognised, Ch. 47, 8.1
ED 5– Insurance Contracts, Ch. 51, 1.2
other guidance on ECLs, Ch. 47, 1.6
ED 9– Joint Arrangements, Ch. 13, 1.1
presentation of ECLs in the statement of financial position,
ED 10– Consolidated Financial Statements, Ch. 13, 1.1
Ch. 47, 14
ED/2009/2– Income Tax, Ch. 29, 1.3, 8.5.1
accumulated impairment amount for debt instruments
ED/2014/3– Recognition of Deferred Tax Assets for Unrealised
measured at fair value through other comprehensive
Losses, Ch. 29, 1.3, 7.4.5
income, Ch. 47, 14.3
126 Index
Exposure Drafts (EDs) —contd
hedging sales of metal concentrate (mining), Ch. 39, 13.4
ED /2014/4 – Measuring Quoted Investments in Subsidiaries,
normal purchase and sales exemption, Ch. 39, 13.1
Joint Ventures and Associates at Fair Value (Proposed
volume flexibility in supply contracts, Ch. 39, 13.3
amendments to IFRS 10, IFRS 12, IAS 27, IAS 28 and
functional currency, Ch. 39, 9
IAS 36 and Illustrative Examples for IFRS 13), Ch. 7,