Walker Yule looks at the new accounting standard due to begin in January 2005 and how it will affect company profits and reward and performance structures put in place for staff
The International Accounting Standards Board (IASB) recently issued IFRS 2, which describes how, from January 2005 for listed entities and January 2006 for unlisted entities, share-based payments should be recognised in financial statements. The standard is very wide in its impact, however in the UK this will mainly affect the reporting and recognition of share options awarded by companies to their staff.
While new accounting standards and requirements are not in themselves exciting news, their impact often is. IFRS 2 is no exception as, depending on the details of a particular company, it may put a huge dent in the reported profits. Overall, IFRS 2 is predicted to reduce the profits of the top 25 FTSE 100 companies by 5.4%, or £68m a year on full implementation.
See full Article.
Posts
