Home › CA Final › financialreporting › Ind AS 102 — Share-based Payment: Scope, Grant Date, Vesting Conditions, Equity-settled vs Cash-settled › An entity grants share options with EXERCISE PRI…
An entity grants share options with EXERCISE PRICE conditional on a 30% increase in the share price over 3 years. The 30% target is a:
AService condition
BMarket condition — it is tied to the share price of the entity's own equity
CNon-market performance condition
DVesting condition unrelated to performance
Answer & Solution
Correct answer: B. Market condition — it is tied to the share price of the entity's own equity
A share-price target IS a market condition. Market conditions are baked into the grant-date FV (using option-pricing models like Monte Carlo) and do NOT result in any true-up if the condition fails — the expense is recognised even if the target isn't hit, as long as service is rendered.
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) sA 'MARKET CONDITION' under Ind AS 102 is one that relates to: