Home › CA Final › financialreporting › Ind AS 102 — SARs, Group SBP, Market Condition Timing, Modification/Cancellation, Real-World Disclosures › Bharti Airtel's disclosed accounting policy: 'ex…
Bharti Airtel's disclosed accounting policy: 'expense determined by grant date FV which INCLUDES impact of MARKET PERFORMANCE conditions and NON-VESTING conditions but EXCLUDES the impact of any service and NON-MARKET performance vesting conditions. However, non-market performance vesting and service conditions are considered in the assumption as to NUMBER of options expected to vest.' This policy is:
ACompliant only for cash-settled awards
BNon-compliant with Ind AS 102
CCompliant only for performance options
DCompliant — correctly distinguishes: market & non-vesting conditions in FV vs service & non-market in number-of-vesting-instruments estimate
Answer & Solution
Correct answer: D. Compliant — correctly distinguishes: market & non-vesting conditions in FV vs service & non-market in number-of-vesting-instruments estimate
This is the canonical Ind AS 102 split: market + non-vesting → into FV (no true-up); service + non-market performance → into vested-number estimate (with true-up). Bharti Airtel's disclosure accurately reflects the standard.
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Bharti Airtel uses Black-Scholes for SBP valuation. Key inputs disclosed include risk-freeAn 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 Entity P issues SBP; market condition expected in 4 years; actually fulfilled in Y5 (a yea