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Under Ind AS 102, MARKET conditions (e.g. share-price target) are accounted for by:
ATreating as a non-vesting condition
BIgnoring entirely
CAdjusting the GRANT-DATE FAIR VALUE of equity instruments (using option-pricing models); NO subsequent true-up if the market condition fails
DAdjusting the number of expected vesting instruments
Answer & Solution
Correct answer: C. Adjusting the GRANT-DATE FAIR VALUE of equity instruments (using option-pricing models); NO subsequent true-up if the market condition fails
Market conditions are baked into grant-date FV using models (e.g. Monte Carlo for share-price targets). NO true-up applies — if the employee provides the required service, expense is recognised even if the market condition fails.
Related questions
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