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 conditional on (i…
An entity grants share options conditional on (i) 4 years of continuous service AND (ii) sales reaching ₹500 cr by year 4. The sales target is a:
ANON-MARKET performance condition — the entity recognises expense based on the BEST ESTIMATE of the number of equity instruments expected to vest; if sales target isn't met, no cumulative expense remains
BMarket condition — only the FV impact is recognised
CReload feature
DService condition only
Answer & Solution
Correct answer: A. NON-MARKET performance condition — the entity recognises expense based on the BEST ESTIMATE of the number of equity instruments expected to vest; if sales target isn't met, no cumulative expense remains
Sales target is a non-market condition. Expense recognition is based on best estimate of how many awards will vest. If non-market target is not met (no vesting), the cumulative expense is fully reversed (true-up to zero). Contrast market conditions where no true-up applies.
Related questions
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