a Share-based Payment

This term refers to a wide range of situations where an entity grants shares, share options, and certain cash payments to directors and employees as part of their remuneration package and to suppliers as consideration for goods and services supplied to the entity. FRS 20 (see 10.5 below) includes a detailed and extensive definition of this term.

b UK GAAP Requirements

The Urgent Issues Task Force has issued a number of Abstracts dealing with various aspects of this topic:

• Disclosure of directors' share options Abstract 10 (subsequently withdrawn, but included in UKLA disclosure rules for fully listed companies);

• Accounting for Employee Share Ownership Plan (ESOP) trusts Abstract 13, superseded by Abstract 38;

• Employee share schemes Abstract 17 (revised on several occasions);

• National Insurance contributions on share option gains Abstract 25;

• Date of award of employees of shares or rights to shares Abstract 30;

• Employee benefit trusts and other intermediate payment arrangements Abstract 32.

The first standard to deal with this subject comprehensively is FRS 20, Share-based payment, issued in April 2004.

FRS 20, and Abstracts 17, 25 and 38 are further referred to below.

a Background

The revised Abstract 17 was issued in December 2003 and should be read in conjunction with Abstract 38 "Accounting for ESOP trusts" which was issued at the same time. These Abstracts have been produced following the publication of Abstract 37 "Purchases and sales of own shares" and the revision to the Companies Act regarding treasury shares in SI 2003/1116.