Share-Based Payments

Question 1

Share-based Payments : Recognition Requirements

Answer 1

• goods or services acquired recognized (as assets or expenses) when they are received
• recognize corresponding increase in equity (equity-settled) or liabilities (cash-settled)
• where there is a vesting period, comp expense is recognized over time in the proportionate amount of the FV of the equity instrument

!! DR Compensation Expense
CR Contributed Surplus - stock options

Question 2

IFRS Share-based Payments: Measurement of Equity-settled SBP

Answer 2

• measure G&S and equity increase at fair value of G&S
• if not reliably estimable use fair value of equity instruments granted

!! for employee payments ALWAYS use FV of equity instruments

!! For all other transactions, assumed that FV of G&S can be reliably estimated