Abstract 44 has the effect of implementing IFRIC Interpretation 11 ‘IFRS 2 – Group and Treasury Share Transactions’ in the UK and the Republic of Ireland for entities preparing their financial statements in accordance with UK accounting standards and, in doing so, are applying FRS 20 (IFRS 2) ‘Share–based Payment’.

The Abstract addresses how to apply FRS 20 to arrangements involving an entity’s own equity instruments or equity instruments of another entity in the same group. The Abstract requires a share-based payment arrangement in which an entity receives goods or services as consideration for its own equity-instruments to be accounted for as an equity-settled share-based payment transaction, regardless of how the equity instruments needed are obtained. The Abstract also provides guidance on whether share-based payment arrangements, in which suppliers of goods or services of an entity are provided with equity instruments of the entity’s parent should be accounted for as cash-settled or equity-settled in the entity’s financial statements.