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An entity MODIFIES an equity-settled SBP after grant date, increasing fair value (favourable to employee). Per Ind AS 102:
ARecognise the entire new FV immediately
BContinue with original grant-date FV; modification has no accounting impact
CReplace original grant-date FV with new modification-date FV from inception
DRecognise the INCREMENTAL FV (modification-date FV minus original FV) as additional expense over the remaining vesting period (in addition to the original grant-date FV expense)
Answer & Solution
Correct answer: D. Recognise the INCREMENTAL FV (modification-date FV minus original FV) as additional expense over the remaining vesting period (in addition to the original grant-date FV expense)
Favourable modifications add incremental FV measured at modification date, expensed over the remaining vesting period. Original grant-date FV expense continues unaffected. Unfavourable modifications (lowering FV) are ignored — entity cannot reduce its previously recognised expense.
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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 INContinuing 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 Entity P issues SBP; market condition expected in 4 years; actually fulfilled in Y5 (a yea