Home › CA Final › financialreporting › Ind AS 102 — Share-based Payment: Scope, Grant Date, Vesting Conditions, Equity-settled vs Cash-settled › An entity has agreed to provide a bonus to emplo…
An entity has agreed to provide a bonus to employees purely based on the price of the entity's own shares. Under Ind AS 102:
ATreat under Ind AS 19 employee benefits
BOut of scope of Ind AS 102
CTreat as equity-settled SBP
DTreat as CASH-SETTLED share-based payment (since cash is paid based on equity prices) — measured at the FV of the liability, remeasured each period to FV with changes in P&L
Answer & Solution
Correct answer: D. Treat as CASH-SETTLED share-based payment (since cash is paid based on equity prices) — measured at the FV of the liability, remeasured each period to FV with changes in P&L
Cash payments based on equity prices fall squarely within Ind AS 102 as cash-settled SBP. Liability is initially measured at FV; remeasured at each reporting date AND at settlement, with changes in P&L. Ind AS 19 covers employee benefits unrelated to equity price.
Related questions
A vesting condition that requires the counterparty to complete a specified period of serviUnder Ind AS 102, transactions with parties OTHER THAN EMPLOYEES (e.g. service providers) Reload Feature/Reload Option under Ind AS 102 is BEST described as:An entity received goods/services for which it issued its own shares at a value DIFFERENT An entity issues its OWN shares to a CHARITY without any consideration. Under Ind AS 102:An entity issues shares for ₹1,000 each (current equity FV ₹1,000), payable in cash by empAn entity grants share options conditional on (i) 4 years of continuous service AND (ii) sAn entity grants share options with EXERCISE PRICE conditional on a 30% increase in the sh