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US GAAP | IFRS |
A performance target that may be met after the requisite service period is complete is a performance vesting condition. The fair value of the award should not incorporate the probability of a performance condition vesting, but rather should be recognized only if the performance condition is probable of being achieved.
A company typically cannot conclude it is probable that a liquidity event, such as an IPO or change in control of the company, will occur until the consummation date of the liquidity event because such an event is (1) fundamental to the company's organizational structure, (2) outside the company's control, and (3) subject to significant external contingencies with a high degree of uncertainty.
| A performance target that may be met after the requisite service period is a non-vesting condition and is reflected in the measurement of the grant date fair value of an award.
Under IFRS, a company should begin to recognize expense for an award that vests only on an exit event, such as an IPO, when it is determined to be probable of occurring. It may be appropriate to conclude that an exit event is probable of occurring before consummation.
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