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Continuing compound SBP: if employee chooses EQUITY alternative (2,400 shares; face value ₹10 each):
ATotal expense ₹15,200; share capital ₹2,40,000
BTotal expense ₹1,35,200; share capital ₹24,000 + premium covers the rest including the equity component transfer
CNo accounting required
DTotal expense ₹1,20,000; share capital ₹24,000 (2,400 × 10); premium ₹96,000 + transfer ₹15,200 from share-based payment reserve → premium ₹1,11,200
Answer & Solution
Correct answer: B. Total expense ₹1,35,200; share capital ₹24,000 + premium covers the rest including the equity component transfer
On equity choice: liability component ₹1,20,000 + equity component ₹15,200 = total ₹1,35,200 cumulative expense over 3 years. On settlement, liability ₹1,20,000 is converted into share capital (₹24,000 = 2,400 × ₹10) + securities premium. Equity reserve ₹15,200 transferred to securities premium too.
Related questions
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