Vesting condition
Conditions include service conditions and performance conditions as defined by IFRS 2. Performance conditions may be market conditions or non-market conditions; their treatment in grant-date fair value and subsequent estimates differs. The vesting period is the period over which the specified vesting conditions are to be satisfied. Recognise the services received over that period, revising estimates of awards expected to vest when the standard requires.
Worked example
Employees receive shares after completing three years of service. The service requirement is a vesting condition, and the three years form the vesting period. The entity recognises the related employee services as they are received.
Common mistake
Treating a market-condition failure identically to a failure to satisfy a service condition, or expensing the whole award only when it vests.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBR | Direct | September 2026–June 2027 |