"IFRIC 8: Scope of IFRS 2 (Withdrawn Effective 1 January 2010)"

IFRIC 8, "Scope of IFRS 2," was an interpretation issued by the International Financial Reporting Interpretations Committee (IFRIC) to provide clarification on the scope of IFRS 2 'Share-based Payment.' It was primarily focused on identifying transactions that should be accounted for as share-based payments under IFRS 2. Although IFRIC 8 was withdrawn effective 1 January 2010, its key points when it was in force included:

- Purpose of IFRIC 8: The interpretation aimed to clarify that IFRS 2 applies to arrangements where an entity makes share-based payments or incurs liabilities to another party in exchange for goods or services.

- Identifying Share-based Transactions: IFRIC 8 required entities to assess whether share-based transactions for goods or services were within the scope of IFRS 2. It emphasized that even transactions not explicitly identified as share-based payments could still fall under IFRS 2 if they involved the issuance of the entity’s own equity instruments or incurrence of liabilities linked to the entity’s share price.

- Equity-settled Share-based Payment Transactions: The interpretation applied to cases where an entity had not previously recognized equity-settled share-based payment transactions, ensuring such transactions were accounted for under IFRS 2.

- Liability and Equity Classification: IFRIC 8 required entities to determine whether such transactions should be classified as equity or as a liability, based on the definitions in IFRS 2.

- Disclosure Requirements: Entities were expected to disclose information about these share-based payment transactions to provide users of financial statements with a clearer understanding of their nature and financial impact.

The withdrawal of IFRIC 8 in 2010 was a result of the amendment to IFRS 2, which broadened its scope to include all share-based payment transactions with third parties for goods or services, regardless of how the entity can choose to settle the transaction. With this amendment, the guidance provided by IFRIC 8 was integrated directly into IFRS 2, making the interpretation redundant.

The significance of IFRIC 8 during its applicability was in ensuring a clearer understanding and application of IFRS 2, particularly in identifying and accounting for share-based payment transactions. Its integration into IFRS 2 highlights the ongoing evolution and refinement of financial reporting standards to address complex accounting issues effectively.

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