Home › CA Final › financialreporting › Ind AS 102 — Vesting Conditions in Practice, Market vs Non-Market, Non-Vesting Conditions, Cash-Alternative Compound SBP › An employee is granted right to choose 2,000 sha…
An employee is granted right to choose 2,000 shares (cash payment based on FV of 2,000 shares) OR 2,400 shares (equity, must hold 3 years post-vesting). Grant date share price ₹50; FV of equity alternative (with post-vesting restrictions) ₹48. FV of compound SBP and its split:
ATotal ₹1,15,200 (2,400 × ₹48); Liability ₹1,00,000; Equity component ₹15,200 (excess of equity FV over cash FV)
BTotal ₹96,000; all liability
CTotal ₹1,20,000; all equity
DTotal ₹2,15,200; bifurcated equally
Answer & Solution
Correct answer: A. Total ₹1,15,200 (2,400 × ₹48); Liability ₹1,00,000; Equity component ₹15,200 (excess of equity FV over cash FV)
Compound SBP with cash/equity choice = liability component (cash alternative FV) + equity component (difference between equity-alt FV and cash-alt FV). Liability = 2,000×50 = ₹1,00,000; Equity = 2,400×48 − 1,00,000 = ₹15,200.
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. ExpApple 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) servAn entity grants options conditional on the employee NOT competing with the entity for 3 y