Part 11 - Share-based payment / Shareholders' equity

Question 1

How to measure share based payment transaction?

Answer 1

fair value of g/s received, unless FV can’t be estimated reliably

Question 2

What if the payment exceeds amount recorded in equity for transaction?

Answer 2

excess get recorded as an expense

Question 3

What is a cash settled share based payment transaction? and how to measure it?

Answer 3

when the entity acquires g/s by incurring a liability for amounts that are based on the price of equity instruments (shares/share option) of the entity or another group entity - measure at fair value of liability

Question 4

How to measure share-based payment transaction with cash alternatives?

Answer 4

compound financial instrument - record debt and equity components separately. measure debt component first then excess will be equity

Question 5

ASPE requires the use of intrinsic value for cash-settled share based payment. what is intrinsic value?

Answer 5

amount by which the market price of the underlying stock exceeds the exercise price of an option

Question 6

What is contributed surplus?

Answer 6

when par value shares are issued at an amount greater than their par value, excess will go to contributed surplus

Question 7

How to account for distribution of non-cash assets to owners

Answer 7

recognize the liability to pay a dividend when it’s authorized
- when dividend payable settle - differences between carrying amount of asset distributed / dividend payable will be in profit/loss