Each month, experts at PwC consider
the accounting implications of key IFRS changes
Employee Benefit Trusts and IFRS 10, Consolidated Financial Statements
ABC plc operates a share option plan as part of its remuneration
package for its employees; it is not a long term employee benefit
plan. The share option plan is operated through an employee benefit
trust (EBT). The trustees of the EBT are also employees of ABC plc.
ABC plc funds the operations of the EBT and also guarantees its obligations.
ABC plc currently consolidates the EBT under the requirements of SIC
12 Consolidation – special purpose entities. Management at
ABC plc is considering IFRS 10, Consolidated Financial Statements.
Should this EBT be consolidated under IFRS 10, and what additional
factors do management need to consider in their assessment of control
over the EBT?
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