| 22.1 | This section sets out the requirements for: |
| (a) | classifying financial instruments as either liabilities or equity and the accounting for compound financial instruments; |
| (b) | the issue of equity instruments, distributions to individuals or other parties acting in their capacity as investors in equity instruments (ie in their capacity as owners) and the accounting for purchases of own equity; and |
| (c) | the accounting for non-controlling interests in consolidated financial statements. |
| Section 26 Share-based Payment sets out the requirements for a transaction in which the entity receives goods or services (including employee services) as consideration for its equity instruments (including shares or share options) from employees and other vendors acting in their capacity as vendors of goods and services. [AMD 458] |
| 22.2 | This section applies to financial instruments except: |
| (a) | Investments in subsidiaries, associates and joint ventures (see Section 9 Consolidated and Separate Financial Statements, Section 14 Investments in Associates and Section 15 Investments in Joint Ventures). |
| (b) | Employers' rights and obligations under employee benefit plans (see Section 28 Employee Benefits). |
| (c) | Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer. |
| (d) | Financial instruments, contracts and obligations under share-based payment transactions (see Section 26), except that paragraphs 22.3 to 22.6 shall be applied to treasury shares issued, purchased, sold, transferred or cancelled in connection with employee share option plans, employee share purchase plans, and all other share-based payment arrangements. |
| (e) | Insurance contracts (including reinsurance contracts) that an entity issues and reinsurance contracts that it holds (see FRS 103). |
| (f) | Financial instruments with a discretionary participation feature that an entity issues (see FRS 103). |
| (g) | Financial guarantee contracts (see Section 21 Provisions and Contingencies). [AMD 459] |
| AMD 458 Amendment Paragraph 22.1 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 22.1 This section establishes principles for classifying financial instruments as either liabilities or equity and deals with the accounting for compound financial instruments. It also addresses the issue of equity instruments and distributions to individuals or other parties acting in their capacity as investors in equity instruments (ie in their capacity as owners) and the accounting for purchases of own equity. This section also deals with the accounting for non-controlling interests in consolidated financial statements. Section 26 Share-based Payment addresses accounting for a transaction in which the entity receives goods or services (including employee services) as consideration for its equity instruments (including shares or share options) from employees and other vendors acting in their capacity as vendors of goods and services. |
| AMD 459 Amendment Paragraph 22.2 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 22.2 This section shall be applied to all types of financial instruments except: (a) Investments in subsidiaries, associates and joint ventures that are accounted for in accordance with Section 9 Consolidated and Separate Financial Statements, Section 14 Investments in Associates or Section 15 Investments in Joint Ventures. (b) Employers' rights and obligations under employee benefit plans, to which Section 28 Employee Benefits applies. (c) Contracts for contingent consideration in a business combination (see Section 19 Business Combinations and Goodwill). This exemption applies only to the acquirer. (d) Financial instruments, contracts and obligations under share-based payment transactions to which Section 26 applies, except that paragraphs 22.3 to 22.6 shall be applied to treasury shares issued, purchased, sold, transferred or cancelled in connection with employee share option plans, employee share purchase plans, and all other share-based payment arrangements. (e) Insurance contracts (including reinsurance contracts) that an entity issues and reinsurance contracts that it holds (see FRS 103 Insurance Contracts). (f) Financial instruments with a discretionary participation feature that an entity issues (see FRS 103). (g) Financial guarantee contracts (see Section 21 Provisions and Contingencies). A reporting entity that issues the financial instruments set out in (e) and (f) or holds the financial instruments set out (e) is required by paragraph 1.6 to apply FRS 103 to those financial instruments. |
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