IFRIC 11
Withdrawn
IFRS 2: Group and Treasury Share Transactions
Clarified share-based payment accounting for treasury share transactions and group share-based payment transactions. Withdrawn in 2010 and its guidance absorbed directly into IFRS 2.
Withdrawn Standard
IFRIC 11 clarified share-based payment accounting for treasury share transactions and group share-based payment transactions. This guidance was withdrawn and folded directly into IFRS 2's own group or treasury share-based payment requirements via 2009 amendments.
This poster is retained for historical and comparative reference. For current share-based payment requirements, always apply IFRS 2.
Current Standard
IFRS 2 Share-based Payment 1
Conceptual Framework Linkage (Historical)
A group-structuring clarification, later absorbed into the standard itself
IFRIC 11 established that EQUITY-SETTLED accounting under IFRS 2 applied even where the entity granting the rights had NO obligation to settle in cash – for example, a SUBSIDIARY whose employees receive rights to the PARENT's shares was still required to account for this as an EQUITY-SETTLED transaction (with a corresponding capital contribution from the parent), rather than treating it as cash-settled simply because the subsidiary itself had no shares to issue.
WHY THIS ABSORPTION HAPPENED
Group structuring clarity – WITHOUT this clarification, entities within complex group structures might have INCONSISTENTLY classified share-based payments Conceptual continuity – this group or treasury share logic was considered CORE enough to IFRS 2's overall scope that the IASB folded it directly into the standard via 2009 amendments
IFRIC 11 is a genuinely INSTRUCTIVE example, alongside IFRIC 4, 8, and 9, of an interpretation whose SUBSTANCE was absorbed almost entirely into its successor standard's own text.
The two parts of IFRIC 11's guidance
PartScenario addressed
Part AAn entity granting rights to its OWN equity instruments, potentially settled via treasury shares
Part BA PARENT granting rights to its shares to a SUBSIDIARY's employees
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Scope & Definitions (Historical)
What IFRIC 11 covered
IFRIC 11 applied to share-based payment arrangements INVOLVING an entity's own equity instruments (potentially settled via market purchase) and arrangements where a PARENT or fellow subsidiary granted rights to employees of ANOTHER group entity.
Key definitions (historical)
Treasury shares
An entity's own previously issued shares, reacquired and potentially used to settle share-based payment obligations.
Group share-based payment transaction
An arrangement where one group entity grants rights to equity instruments to employees of ANOTHER group entity.
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Part A – Treasury Share Transactions (Historical)
Equity-settled classification confirmed, regardless of settlement mechanism
IFRIC 11 confirmed that an arrangement where an entity granted rights to its OWN equity instruments was classified as EQUITY-SETTLED even if the entity chose (or was required) to purchase shares from the MARKET to satisfy the obligation, rather than issuing NEW shares – the settlement MECHANISM did not change the fundamental classification.
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Part B – Group Share-Based Payment Transactions (Historical)
Historical illustration
Example 1: Parent-granted options to subsidiary employees
A listed parent company granted share options over its OWN shares to employees of a wholly-owned SUBSIDIARY, with the subsidiary having NO obligation to settle the awards and no shares of its own involved.
Under IFRIC 11, the SUBSIDIARY recognised the share-based payment expense as EQUITY-SETTLED (with a CORRESPONDING increase in equity, representing a deemed capital contribution from the parent), even though the subsidiary itself had no obligation to deliver shares.
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Which Entity Recognises the Expense (Historical)
The subsidiary recognises the expense; the parent recognises an investment increase
The SUBSIDIARY receiving employee services recognised the share-based payment EXPENSE in its own (standalone) financial statements, with the PARENT recognising a CORRESPONDING increase in its investment in the subsidiary – a two-sided treatment PRESERVED in IFRS 2's current group transaction guidance.
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Cash-Settled vs Equity-Settled Classification (Historical)
Identical to the current approach
The SUBSIDIARY's own classification (equity-settled vs cash-settled in ITS standalone financial statements) depended on WHETHER it had an obligation to settle in cash to its own employees – IDENTICAL classification logic PRESERVED in IFRS 2's current group transaction framework.
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How This Guidance Became Part of IFRS 2
A genuinely instructive absorption case
The IASB concluded IFRIC 11's group or treasury share transaction logic was FUNDAMENTAL enough to IFRS 2's overall scope that it should be embedded DIRECTLY within the standard. Via 2009 amendments to IFRS 2 (effective for periods beginning on or after 1 January 2010), IFRIC 11's substance was FOLDED INTO IFRS 2 itself, and IFRIC 11 was FORMALLY WITHDRAWN.
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Common Historical Application Areas
Where this analysis was most frequently applied
Multinational groups whose employees at various subsidiaries participate in a GLOBAL parent's equity incentive plan are a common application context – the subsidiary must recognise its OWN share-based payment expense even though shares are ultimately issued by the foreign parent, an application governed today by IFRS 2's own absorbed group transaction guidance.
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Disclosure (Historical)
Historical disclosure expectations
Nature of group share-based payment arrangements involving the reporting entity Basis for equity-settled vs cash-settled classification at the subsidiary level
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Judgments & Estimates (Historical)
Where judgement historically mattered most
SIGNIFICANT JUDGEMENTS
Whether the subsidiary had any obligation to settle awards in cash Identifying which group entity bore the ultimate settlement obligation
SIGNIFICANT ESTIMATES
Fair value of the parent's equity instruments granted, measured per IFRS 2's general model
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IFRIC 11 vs Current IFRS 2 Approach
Comprehensive historical-to-current comparison
FeatureIFRIC 11 (historical)IFRS 2 (current)
Treasury share settlement classificationEquity-settled regardless of settlement mechanismSUBSTANTIALLY PRESERVED, embedded directly in the standard's own group transaction requirements
Group transaction subsidiary classificationDepends on the subsidiary's own settlement obligationIDENTICAL logic, now part of IFRS 2's own text
IFRIC 11 stands out, alongside IFRIC 4, 8, and 9, as a withdrawn interpretation whose CORE LOGIC survives almost entirely intact within its parent standard.
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Statement Mapping (Historical)
Where IFRIC 11 determinations historically fed into
ItemStatement(s) affectedNotes
Subsidiary's share-based payment expenseP&L EquityRecognised in the subsidiary's own standalone financial statements
Parent's corresponding investment increaseSOFPRecognised in the parent's own standalone or separate financial statements
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Related Standards
Cross-reference map
StandardConnection
IFRS 2The CURRENT standard, absorbing IFRIC 11's group or treasury share logic directly
IFRIC 8A related historical interpretation on IFRS 2 scope, also absorbed into the standard
IAS 27Governs the parent's separate financial statement investment recognition
Quick-reference glossary
Deemed capital contribution
The equity increase a parent recognises corresponding to a subsidiary's share-based payment expense under a group arrangement.
Fellow subsidiary
A sister entity within the same group, potentially granting rights to another subsidiary's employees under IFRIC 11's historical Part B scope.
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Glossary
Treasury shares
An entity's own previously issued shares, reacquired and potentially used to settle share-based payment obligations.
Group share-based payment transaction
An arrangement where one group entity grants rights to equity instruments to employees of another group entity.
Deemed capital contribution
The equity increase a parent recognises corresponding to a subsidiary's share-based payment expense under a group arrangement.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows
History & Development
Jan-2006
In January 2006 the International Accounting Standards Board issued IFRIC 11 IFRS 2: Group and Treasury Share Transactions. It was developed by the Interpretations Committee.
Jan-2010
IFRS 2 amended to incorporate IFRIC 11 guidance
IFRIC 11 withdrawn and its substance absorbed into IFRS 2's own group transaction requirements