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Under Ind AS 102, vesting conditions (other than MARKET conditions) are accounted for by:
AReversing the entire expense at vesting
BAdjusting the NUMBER of equity instruments included in the measurement of the transaction so that, ultimately, the amount recognised reflects the number that actually vests
CRecognising the full grant-date FV regardless
DAdjusting the FAIR VALUE of the equity instrument at grant date
Answer & Solution
Correct answer: B. Adjusting the NUMBER of equity instruments included in the measurement of the transaction so that, ultimately, the amount recognised reflects the number that actually vests
Service conditions and non-market performance conditions adjust the NUMBER of expected vesting instruments, not the grant-date FV. If conditions fail, cumulative expense is reversed (true-up to zero).
Related questions
Under Ind AS 102, a RELOAD FEATURE is treated as:An entity granted share options with VESTING period 3 years. After Year 2, the EMPLOYEE LEContinuing compound SBP: if employee chooses EQUITY alternative (2,400 shares; face value Continuing compound SBP: 3-year vesting. Year-end share price: Y1 ₹52, Y2 ₹55, Y3 ₹60. ExpAn employee is granted right to choose 2,000 shares (cash payment based on FV of 2,000 shaApple Ltd grants 10,000 share options requiring 3 years' service + 20% share-price growth Continuing Ankita example: at end of 20X2, earnings grew 18% (not 20%), so target shifts tAnkita Ltd. grants 100 shares each to 500 employees on 1 Jan 20X1, conditional on (a) serv