Share Based Payments

Question 1

Sbp

Measurement- transactions other than with employees, equity settled

Answer 1

G and s and increase in equity measured at fv of g and s, unless cannot be established reliably then fv of equity instrument granted.

If sbp made for inadequate consideration then measure consideration received with reference to equity fv granted

Question 2

Sbp

Measurement- transactions with employees

Answer 2

Difficult to value as it is usually in addition to basic remuneration.
Measured at:
Fv of equity granted at grant date. Based on market prices.

Question 3

Sbp

Transactions in which services are rendered. Equity settled

Answer 3

Immediate vesting
Presume services rendered already received. On grant date recognize services received in full.

Subsequent vesting
-vesting conditions: counter party must satisfy to become entitled.
Service conditions… Complete specific period of service
Performance conditions… Period of service and performance targets
to be met, may include market conditions.
-market conditions: exercise price, vesting, exercisability of equity instruments depend on certain conditions relating to the market price.

Vesting conditions are not taken into account in estimating fv of equity at grant date, but used to adjust number of equity instruments included in estimates cumulatively. Look at wether it is total expected to not vest or additional expected to not vest.

Market conditions are taken into account for fv of equity at grant date, and not changed subsequently due to changes in market conditions even if not met.

Question 4

Sbp

Cash settled

Answer 4

Measurement… Fv of liability. Liability is remeasured at each reporting period with changes going to pl.
Thus the value of the liability changes each year with fv unlike equity settled.

Question 5

Sbp

Recognition

Answer 5

Recognize when goods or services received
Recognize corresponding liability or increase in equity
If not qualify for asset, then expense.