Home › CA Final › financialreporting › Ind AS 102 — SARs, Group SBP, Market Condition Timing, Modification/Cancellation, Real-World Disclosures › Entity P issues SBP requiring (i) share price re…
Entity P issues SBP requiring (i) share price reaching ₹30 (market condition) AND (ii) service until that target is met. Expected period to fulfilment is 4 years. Grant FV with market condition = ₹2,500 total. Scenario: market condition fulfilled in Y3. Identify expense pattern.
AY1-Y4: ₹625 each year regardless
BRecognise expense over actual fulfilment period (3 years): ₹833 × 3
CY3 only: ₹2,500
DY1 ₹625, Y2 ₹625, Y3 ₹1,250 (accelerated remainder of grant-date FV when market condition met early), Y4 Nil
Answer & Solution
Correct answer: D. Y1 ₹625, Y2 ₹625, Y3 ₹1,250 (accelerated remainder of grant-date FV when market condition met early), Y4 Nil
Market condition met EARLIER than expected → recognise remaining unrecognised expense IMMEDIATELY. After 2 years recognised ₹1,250 (Y1+Y2 of 4-year linear); when condition met in Y3, remaining ₹1,250 recognised in Y3 (Y3+Y4 caught up).
Related questions
Bharti Airtel uses Black-Scholes for SBP valuation. Key inputs disclosed include risk-freeBharti Airtel's disclosed accounting policy: 'expense determined by grant date FV which INAn entity MODIFIES an equity-settled SBP after grant date, increasing fair value (favourabContinuing MINDA SAR: at Y3 end, FV ₹141; actual exercise 85%. Compute Y3 incremental expeContinuing MINDA SAR: at end Y2, FV = ₹139; expected exercise 91%. Compute Y2 incremental MINDA issued 11,000 SARs vesting immediately on 1 Apr 20X0. SAR FV ₹100 grant; ₹132 (Y1), Ambani Ltd grants CEO option (1 Jan 20X0) to take 800 shares' cash equivalent OR 990 shareEntity X grants 10 shares each to 1,000 employees conditional on remaining in service AND