Tucan is a first-time IFRS adopter, its date of transition is 1 January 2018 and its first IFRS reporting period end 31 December 2019. On 1 January 2018, Tucan granted 25,000 share options to each of its four executives, which they may exercise only if (a) they remained employed for three years following the date of grant and (b) its earnings per share in 2020 is 50% higher than it was in 2017.
Since Tucan granted 25,000 share options to each of its four executives on 1 January 2018, is it required to fully apply IFRS 2?
IFRS 2 may be optionally applied to only those transactions that vested in 2019.
No, IFRS 2 must only be applied to transactions occurring after 31 December 2019.
Yes, IFRS 2 must be fully applied
Yes, IFRS 2 must be fully applied. As a first-time IFRS adopter, Tucan is required to apply IFRS 2 Share-based Payment in its entirety from its date of transition, which is 1 January 2018. Since the share options were granted on this date, IFRS 2 requires an entity to recognize a liability for share-based payment arrangements at fair value on the date of grant, regardless of whether the options have vested or not. Therefore, Tucan needs to apply IFRS 2 to these transactions from 1 January 2018 onwards.
