10 March 2008
International Accounting Standards Board
30 Cannon Street,
London EC4M 6XH,
United Kingdom
Dear Sirs:
Consejo Mexicano para la Investigación y Desarrollo de Normas de Información
Financiera (CINIF) the accounting standards setter body in Mexico, welcomes the
opportunity to submit our comments on the Exposure Draft Amendments to IFRS 2
Share-based Payment and IFRIC 11 IFRS 2 – Group and Treasury Share
Transactions. Set forth below you will find our comments to the specific questions that
are included in the Exposure Draft.
Question 1
We agree with the proposed amendments, except that we do not agree with the
second part of new paragraph 11B that indicates “…and in the subsidiary’s equity as
adjustments to contributions to the parent”. We do believe this would be correct if the
parent has committed to contribute a certain amount to the subsidiary as equity, but not
otherwise. Until such commitment is made the subsidiary has a liability, as indicated in
IFRS 2 for cash-settled share-based payments. This is an operating liability and not a
financial instrument to which the concept discussed in paragraph 17 of IAS 32 should
be applied.
The amendment of paragraph 5 of IFRIC 11 indicates that “Regardless of whether
there is a reimbursement arrangement between a parent and its subsidiary, the
subsidiary that receives services from its employees shall account for the services in
accordance with IFRS 2”. In this case IFRS 2 requires that cash-settled share-based
payments be recognized as a liability until the liability is settled.
Therefore there is an inconsistency in how the credit for this transaction is being
proposed to be recognized.
Question 2
We agree that the proposed amendments be applied retrospectively, subject to the
transitional requirements of IFRS 2.
Should you require additional information on our comments listed above, please
contact me at 00-52-55-5596 5633/26/34 or by e-mail at
fperezcervantes@cinif.org.mx
Sincerely,
C.P.C. Felipe Perez Cervantes
President of the Mexican Accounting Standards Board
Consejo Mexicano para la Investigacion y Desarrollo
de Normas de Informacion Financiera (CINIF)