Chapter 10 - Share-based Payment Flashcards
What are the two types of share-based payments?
Equity settled and cash settled
What is a equity-settled share based payment?
The entity settles the transaction in shares of share options
What is a cash-settled share based payment?
The entity settles the transaction in cash based on its share price
What is the accounting entry for an equity settled share based payment?
Dr Asset
CR Equity
What are the two valuation methods for equity based schemes?
Used to pay suppliers - direct
Used to pay employees - indirect
What is the grant date?
The date at which the entity and the other party to the relationship
If there is no vesting conditions attached to a share-based payment, how is this accounted for?
For full at the grant date
What are vesting conditions?
Conditions that the counter party must meet the entity should account for the receipt of services over the besting period
What are the two types of vesting conditions?
Market based and non-market based
How should we account for after the vesting period?
No further adjustments
How do you account for cancellation in a scheme?
Immediately recognises the total remaining share-based payment, payments made to employees are counted as a deduction and anything in excess of fair value to profit and loss
