IFRIC 8
Withdrawn
Scope of IFRS 2
Clarified that IFRS 2's scope extends to transactions where identifiable consideration received appears less than the fair value of equity instruments granted. Withdrawn in 2009 and its guidance absorbed directly into IFRS 2.
Withdrawn Standard
IFRIC 8 clarified that IFRS 2's scope extends to transactions where identifiable consideration received appears less than the fair value of equity instruments granted, indicating unidentifiable goods or services were also received. This clarification was withdrawn and folded directly into IFRS 2's own scope paragraphs via amendment.
This poster is retained for historical and comparative reference. For current share-based payment scope requirements, always apply IFRS 2.
Current Standard
IFRS 2 Share-based Payment 1
Conceptual Framework Linkage (Historical)
A scope clarification later absorbed into the standard itself
IFRIC 8 addressed a genuine practical question: IF an entity grants equity instruments and the IDENTIFIABLE consideration received (if any) appears to be LESS than the fair value of those instruments, does IFRS 2 STILL apply? IFRIC 8 CONFIRMED it does – the shortfall indicates that OTHER (unidentifiable) consideration, typically employee or supplier SERVICES, must also have been received.
WHY THIS ABSORPTION HAPPENED
Closing a scope loophole – WITHOUT this clarification, entities could have argued IFRS 2 did not apply to certain equity-settled arrangements simply because NO explicit employee or supplier service was identified Conceptual continuity – the IASB later concluded this clarification was FUNDAMENTAL enough to IFRS 2's own scope that it belonged IN the standard itself
IFRIC 8 is a genuinely INSTRUCTIVE example of an interpretation whose entire SUBSTANCE was absorbed almost verbatim into its parent standard's scope section.
The core clarifying logic IFRIC 8 established
Identifiable consideration received < Fair value of equity instruments granted → IFRS 2 applies to the shortfall as unidentifiable goods or services received
ℹ️ This exact logic is now embedded DIRECTLY within IFRS 2's own scope paragraphs.
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Scope & Definitions (Historical)
What IFRIC 8 covered
IFRIC 8 applied to transactions where an entity made SHARE-BASED PAYMENTS for apparently NIL or INSUFFICIENT identifiable consideration, requiring assessment of whether unidentifiable goods or services had ALSO been received.
Key definitions (historical)
Identifiable consideration
Consideration EXPLICITLY specified or documented in an arrangement – the concept IFRIC 8 required comparing against fair value.
Unidentifiable goods or services
Value received by the entity NOT explicitly documented, inferred from a shortfall between identifiable consideration and fair value.
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The Core Clarification (Historical)
Closing a scope interpretation gap
IFRIC 8 confirmed IFRS 2's scope was NOT limited to arrangements with EXPLICITLY identified employee or supplier services – a shortfall between identifiable consideration and grant-date fair value was ITSELF sufficient evidence that additional, unidentifiable consideration had been (or would be) received, bringing the arrangement within IFRS 2's scope.
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Identifiable vs Unidentifiable Consideration (Historical)
Historical illustration
Example 1: Shares issued to a strategic business partner
A company issued equity shares with a fair value of $500,000 to a strategic business partner, with the documented consideration being ONLY a vague "strategic cooperation" commitment with no specific identifiable services or cash contribution.
Under IFRIC 8, the ENTIRE $500,000 fair value would be assessed for IFRS 2 recognition – since NO clearly identifiable consideration matched the fair value granted, the SHORTFALL itself was treated as evidence of unidentifiable goods or services received.
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Transactions with Non-Employees (Historical)
Extending beyond typical employee stock compensation
IFRIC 8 was particularly significant for NON-EMPLOYEE arrangements (e.g. shares issued to consultants, business partners, or in connection with acquisitions of INTANGIBLE items not otherwise recognisable), where the absence of a traditional "service agreement" might otherwise have been argued to place the arrangement OUTSIDE IFRS 2's scope.
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Measurement When Consideration Appears Insufficient (Historical)
Fair value of equity instruments as the measurement anchor
Consistent with IFRS 2's general measurement hierarchy, the FAIR VALUE of the equity instruments granted was used to measure the transaction where the value of the unidentifiable goods or services could not itself be reliably estimated – IDENTICAL to IFRS 2's own general "cannot estimate fair value of goods or services" fallback.
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How This Guidance Became Part of IFRS 2
A genuinely instructive absorption case
The IASB concluded IFRIC 8's clarification was so INTEGRAL to correctly applying IFRS 2's scope that it should be stated DIRECTLY within the standard, rather than requiring practitioners to cross-reference a separate interpretation. IFRIC 8 was formally WITHDRAWN in 2009, with its substance incorporated into IFRS 2's own scope paragraphs.
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Common Historical Application Areas
Where this analysis was most frequently applied
Shares issued to consultants or advisors for below-market or nominal consideration, shares issued in connection with acquisitions where part of the consideration related to future services, and shares issued to charitable organisations or as sponsorship arrangements – ALL contexts where IFRS 2's current absorbed scope guidance remains equally relevant today.
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Disclosure (Historical)
Historical disclosure expectations
Nature of arrangements where identifiable consideration was less than fair value granted Basis for estimating the value of unidentifiable goods or services received
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Judgments & Estimates (Historical)
Where judgement historically mattered most
SIGNIFICANT JUDGEMENTS
Whether identifiable consideration genuinely fell short of grant-date fair value Nature or timing of the unidentifiable goods or services implied by the shortfall
SIGNIFICANT ESTIMATES
Fair value of the equity instruments granted, per IFRS 2's general measurement approach
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IFRIC 8 vs Current IFRS 2 Scope
Comprehensive historical-to-current comparison
FeatureIFRIC 8 (historical)IFRS 2 (current)
Core scope clarificationShortfall = unidentifiable goods or services receivedSUBSTANTIALLY PRESERVED, embedded directly in the standard's scope paragraphs
Location of guidanceSeparate interpretationAbsorbed directly into IFRS 2's own scope section
IFRIC 8 stands out, like IFRIC 4, as a withdrawn interpretation whose CORE LOGIC survives almost entirely intact within its parent standard.
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Statement Mapping (Historical)
Where IFRIC 8 determinations historically fed into
ItemStatement(s) affectedNotes
Share-based payment expense (unidentifiable services)P&L EquityUnder IFRS 2's general recognition model
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Related Standards
Cross-reference map
StandardConnection
IFRS 2The CURRENT standard, absorbing IFRIC 8's scope clarification directly
IFRIC 11A related historical interpretation on group or treasury share transactions, also absorbed into IFRS 2
Quick-reference glossary
Grant-date fair value
The measurement anchor used in IFRS 2's general model, and the benchmark against which identifiable consideration was compared under IFRIC 8.
Equity-settled share-based payment
The transaction type IFRIC 8's scope clarification most commonly addressed.
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Glossary
Identifiable consideration
Consideration explicitly specified or documented in an arrangement – the concept IFRIC 8 required comparing against fair value.
Unidentifiable goods or services
Value received by the entity not explicitly documented, inferred from a shortfall between identifiable consideration and fair value.
Grant-date fair value
The measurement anchor used in IFRS 2's general model, and the benchmark against which identifiable consideration was compared.
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 8 Scope of IFRS 2. It was developed by the Interpretations Committee.
Jan-2009
IFRS 2 amended to incorporate IFRIC 8 guidance
IFRIC 8 withdrawn and its substance absorbed into IFRS 2's own scope paragraphs