Last month the International Accounting Standards Board (IASB) briefly discussed IFRS2 (Share Based Payment) and gave themselves a metaphorical “pat on the back,” concluding that the Share Based Payment Standard was working well.

Whether this is generally thought to be the case is another matter, because at the same time the IASB observed that they had received many requests for clarification of the Standard. However these requests seemed to be regarded by the IASB as an annoyance rather than a cause for reflection or concern.

In contrast the UK’s own domestic accounting standards board (ASB) recognise, at least in the context of unquoted companies (where it still has the primary responsibility for accounting standards), that the Standard might need review.

On 23 April 2013 the ASB issued a consultation document on the future of Share Based Payment for unquoted companies. This raises several fundamental questions about the relevance of the current standard and the ASB is to be commended for its open-mindedness in promoting this review.

Amongst possible changes considered are (i) the complete abolition of the accounting expense for equity-settled share based payments for unquoted companies on the grounds that the calculation of the expense is too artificial and (ii) its replacement with an enhanced disclosure regime for equity based awards, such as options.

The deadline for responses is 31 July 2013 at the latest and we would encourage everyone with an interest in this subject to take the opportunity to make their views known about the consultation click here.

To go to our section on accounting for share schemes click here.