BC8 Some employee share plans are described as ‘broad‑based’ or ‘all‑employee’ plans, in which all (or virtually all) employees have the opportunity to participate, whereas other plans are more selective, covering individual or specific groups of employees (eg senior executives). Employee share purchase plans are often broad‑based plans. Typically, employee share purchase plans provide employees with an opportunity to buy a specific number of shares at a discounted price, ie at an amount that is less than the fair value of the shares. The employee’s entitlement to discounted shares is usually conditional upon specific conditions being satisfied, such as remaining in the service of the entity for a specified period.

BC9 The issues that arise with respect to employee share purchase plans are:

(a) are these plans somehow so different from other employee share plans that a different accounting treatment is appropriate?

(b) even if the answer to the above question is ‘no’, are there circumstances, such as when the discount is very small, when it is appropriate to exempt employee share purchase plans from an accounting standard on share‑based payment?