A start-up client has granted share options with an exercise price at nominal value vesting over 3 years. Initial funding has been in the form of grants and SAFEs so no shares issued yet other than founder shares. Other companies in similar situation do not seem to apply IFRS2 or note the effect is not material.
Is it correct to ascribe a low/neglible fair value to the shares and therefore no charges to P&L are needed? B y offereing share options salaries paid by client are below normal market rates but not significantly. The share options are mainly a retention incentive.