IFRS 2 Share-based Payment 

Question 1

Type 1

Answer 1

• Equity settled
• recognise equity reserve and P/L charge each year (pro rated over period)
• Use FV of option @ grant date and estimatre @ each reporting date the expected number of options expected to vest

Question 2

Type 2

Answer 2

• Cash settled
• recognise liability and P/L charge each year (pro rated over vesting period)
• Use Fv of share appreciation rights @ each reporting date and estimate # expected to vest @ each reporting date