The Accounting Standards Board (ASB) has decided not to amend the FRS 20 (IFRS 2) standard ("Share-based Payment") where it is applied to subsidiary companies who grant options over the equity shares of the parent company.
The ASB board had said that it would consider amending FRS 20 when it emerged that some companies would have to carry the burden of calculating the cost of the share-based transaction separately from how it is measured in the group financial statements.
Following careful consideration, the ASB believes that an amendment "would result in a difference between FRS 20 and the international standard on which it is based, IFRS 2".
Only a handful of companies affected
While it conceded that some companies would make cost savings, the board said this would only apply in a small number of cases, and not to those cases where a grant of options is made by the parent firm.
"The board concluded that the importance of not introducing a divergence between the UK standard and the international standard outweighed the cost benefit to preparers, and that no amendment to FRS 20 would therefore be proposed," the ASB said.
The ASB board is made up of two full-time and up to nine part-time members.
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