Brussels, 21/12/2004 (Agence Europe) - The Accounting Regulatory Committee (ARC) has given a positive opinion of a Commission Regulation making mandatory the international financial reporting standard (IFRS 2) on share based payments. 8000 companies quoted on the stock exchange will be covered by IFRS 2 in January 2005. The European Parliament now has a month to react before IFRS 2 is officially introduced.
The IFRS 2 belongs to the 'stable platform' of accounting standards, which all listed European companies will adopt as they move to international accounting standards. It requires for the first time that companies reflect in their income statements the effects of share-based payment transactions, including expenses associated with transactions in which share options are granted to management and employees (stock options). In future, expensing stock options in the income statement will impact on reported earnings.