Given the significant impact of the Kontera case, multinationals with branches in Israel should carefully consider this draft circular and consider its potential impact on their reload payments and the total cost of the SBC. Payments and agreements that do not comply with the conditions set out in the draft circular, as well as those that do not comply with the Kontera case, should consider either aligning themselves with the ITA position or addressing the risks associated with it, including the effects on taxation. For this analysis, the ITA considers whether the payment of the sale of the instrument, the fair value (FMV) of the instrument at the time of issuance, the date of signing the reload contract (in relation to the date of issuance of the capital instruments) and the consideration of the costs of the total amount of the SBC in accordance with the kontera Caseera decision is linked to the cost basis. The Committee received a request for clarification regarding the accounting of intragroup offsets for equity transactions. According to our surveys, nearly 50% of companies have implemented reloading contracts. Of the companies with more than 1,000 participants, 82% recharged. The bar outlined the pros and cons of each approach without recommending a particular approach. The Staff also summarized public relations on prevalence and diversity in practice on this subject, which revealed large differences in recovery accounting (although many interviewees, referring to feedback, showed that the problem was not widespread in their jurisdiction). Learn more about our financial reporting services, including how we help report and track reload programs. The review proposal describes a specific pattern of facts in which the parent company of an international group awards stock-based bonuses to employees of its subsidiaries. The obligation to pay these premiums is that of the parents. Premiums are based on the employee`s performance at the subsidiary.
Both the subsidiary and the parent company recognize the share transaction according to IFRS 2 Stock-based payment – usually during the bonus lock-in period. The parent company also enters into recharging agreements with its subsidiaries that require subsidiaries to pay the parent company the value of stock-based premiums after payment of premiums by the parent company.