Share-Based Payment — ASC 718 vs IFRS 2
Both ASC 718 (US GAAP) and IFRS 2 (IFRS) measure equity-settled awards at grant-date fair value and expense over the vesting period. The differences are in forfeitures, attribution, and deferred tax.
US GAAP vs IFRS 2 — the differences that matter
Section titled “US GAAP vs IFRS 2 — the differences that matter”| Area | US GAAP (ASC 718) | IFRS (IFRS 2) |
|---|---|---|
| Forfeitures | Estimate, or recognize as they occur (policy election) | Must estimate |
| Graded vesting | Policy choice (straight-line or accelerated) for service conditions | Accelerated (each tranche treated separately) |
| Deferred tax | Based on cumulative book expense | Remeasured on intrinsic value each period |
Key judgment areas
Section titled “Key judgment areas”- Fair value model and inputs (volatility, expected term).
- Vesting conditions — service, performance, market.
- Modifications, cancellations, and cash-settled (liability) awards.
Related
Section titled “Related”- SAP implementation: SAP HCM / payroll — expense accrual over the vesting period — write-up forthcoming under SAP & Enterprise Systems.
Limitations
Section titled “Limitations”An educational reference and original synthesis — not investment advice, and not a substitute for the standard or for professional accounting guidance. For authoritative measurement detail, consult ASC 718 / IFRS 2 directly.
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