The International Financial Reporting Standards Interpretations Committee decided that it was unable to align the requirements of International Financial Reporting Standard (IFRS) 2, Share-based Payment, with U.S. GAAP on the accounting treatment of withholding tax payments on stock options. Under U.S. GAAP, the portion of the share-based payment that is withheld does not require liability classification, whereas under IFRS 2, an award is classified as cash-settled if the entity incurs a liability to transfer cash or other assets as a result of acquiring goods or services. The Committee opined that IFRS 2 provides sufficient guidance to address the issue and declined to add the issue to its agenda; however, it recommended that the International Accounting Standards Board consider the issue as part of its post-implementation review of IFRS 2. The Committee's decision means that international standards and U.S. GAAP will continue to diverge where an entity settles a withholding tax obligation on behalf of its employee, potentially resulting in earnings volatility for U.S. entities. IFRIC Update.