Equity instrument granted
The right can be conditional or unconditional, and may relate to shares or options. For an equity-settled employee award, IFRS 2 generally measures the services by reference to the grant-date fair value of the instruments granted and recognises them over the relevant vesting period, taking account of applicable vesting conditions. A grant is not the same event as exercise of an option or issuance of the underlying shares.
Worked example
An employer agrees to grant an employee 100 share options subject to three years’ service. The options are equity instruments granted; the employer accounts for employee service over the vesting period under IFRS 2.
Common mistake
Treating the number of instruments granted as automatically the number that will vest, or treating grant date as option exercise date.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |