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Ind-AS 102: Share Based Payment (Cash and Equity Settled Options…
Ind-AS 102: Share Based Payment
SBP to External Parties
Goods/Assets
Recognition on acquisition date
Consider fair value of goods acquired.
Use fair value of shares if this is not available
Services
Consider fair value of services received.
Use fair value of shares if this is not available
Amortise fair value of services received on SLM basis
over service period on monthly basis
Issue shares at end of service period
Transfer to SBP reserve
SBP to Employees
Without consideration
In Shares
Without vesting
(ESPP)
Use fair value after restriction
if there are post vesting conditions
Debit entire exp. immediately
With vesting
Service Condition
(ESOP)
E.B. Exp = No of shares x Fair value on grant date
/Vesting Period
Transfer to SBP reserve
Issue shares at end of vesting period
Consider actual and estimated leaving of employees
Fair value used in calculation stays the same
Performance Condition
Market related
(Market price)
Non market related
(Sales, NP, Cost control etc)
In Cash
(SAR)
Cash payment at end of vesting period
based on current market price
Transfer to SBP liability
Fair value used in calculation changes every year
With consideration
(Intrinsic value method)
ESOPS with exercise price
E.B. Exp = Fair value per share - Exercise price per share
Cash and Equity Settled Options
Calculate equity component on grant date
Fair value of ESOPS - Fair value of SAR
Equity component treated as ESOPS and
amortised over vesting period
SAR trated as SBP liability
Assume all employees are interested in cash
Write off balance in SBP reserve at the end
Modification in ESOPS
Accounting treatment for original exp. will continue unaffected
Additional exp = Fair value of shares at time of modification - Exercise price at time of modification
Amortise additional exp over remaining vesting period
Cancellation
Stop accounting on date of cancellation
Any consideration paid out of SBP reserve
Unutilised balance in SBP reserve transferred to SOPL