Employee Token Grant — Share-Based Payment (IFRS 2)
Recording a grant of company governance or utility tokens to employees as compensation — applying IFRS 2 Share-Based Payment with the token's grant date fair value amortised over the vesting period.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Token-Based Compensation Expense (IFRS 2 — Vested Portion) | Expense (+) | 185,000.00 | - |
| Token Reserve / Additional Paid-In Capital (Equity-Settled SBC) | Equity (+) | - | 185,000.00 |
💡 Accountant's Note
Many crypto companies compensate employees with their own governance or utility tokens instead of (or in addition to) cash salaries and stock options. Under IFRS 2, token grants to employees are share-based payments — the grant date fair value of the tokens is recognised as an expense over the vesting period. If tokens are classified as equity instruments of the issuing entity: equity-settled treatment applies (credit to equity, no remeasurement after grant date). If tokens are classified as liabilities (a cash-settled obligation to deliver tokens with market value fluctuation): liability-settled treatment applies (remeasurement to FV at each reporting date, with P&L impact). The classification depends on whether the tokens represent residual interests in the company (equity) or obligations to deliver assets (liability).
Practitioner & Systems Framework
💻 ERP Architecture
Token grant accounting parallels stock option accounting under IFRS 2. The key steps: (1) Determine grant date FV of the token (using the market price if listed, or a valuation model if unlisted), (2) Identify the vesting conditions (service conditions, performance conditions — e.g., platform launch milestones), (3) Amortise the grant date FV over the vesting period for equity-settled awards, (4) Remeasure at each reporting date for liability-settled awards. Forfeited unvested tokens (employees who leave before vesting) result in a reversal of previously recognised expense.
⚠️ Audit Flags
Auditors test the IFRS 2 classification (equity vs. liability-settled). The most challenging area: governance tokens that grant economic rights similar to shares may be equity-settled; utility tokens with no ownership rights may be liability-settled or fall outside IFRS 2 entirely. Test the grant date FV (particularly for unlisted tokens — requires a valuation model). Confirm vesting condition assessment (service conditions vs. market conditions vs. performance conditions — each has different expense recognition patterns).
📄 Required Documentation
Token grant agreement (quantity, grant date, vesting schedule, conditions), IFRS 2 classification analysis (equity vs. liability-settled), grant date FV determination (market price or valuation model), vesting condition classification, IFRS 2 expense calculation by period, forfeiture experience and estimated rate, and token reserve movement in equity.
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