CERTYNEX IFRS ACADEMY

Orme SA has set up a share option plan for its employees. To cover the plan, it buys back 20,000 of its own shares on the market (case facts). What treatment applies to this repurchase of treasury shares?

The repurchase is excluded from IAS 32, since the option plan falls under IFRS 2, and the shares are recorded as an asset of Orme and the repurchase falls entirely outside the scope of the standard.

The repurchase is a financial asset measured at fair value, since it serves to cover a future cost of the option plan.

The repurchase is recognised as a staff cost, since it serves to remunerate the employees who benefit from the plan.

The shares repurchased remain subject to the IAS 32 rules on treasury shares and are deducted from equity, even though the plan falls under another standard.