SHARE BASED PAYMENTS.pptx IFRS 2, IND AS 102

Share Based Payments, Income Tax

1. SHARE BASED PAYMENTS (IFRS 2,Ind AS 102)

2. Meaning and objective Equity shares are used to make payments to suppliers for goods and services. It should be specified in the financial reporting when share based payment transaction is made – Ind AS 102.

3. Share based payment transaction Entity: Receives or acquires goods or services as consideration of equity instruments. Incurs liabilities for the amount based on the price of equity instruments of entity .

4. Grant date & vesting period Grant Date: Date on which the entity and another party agree to a share based payment arrangement. If any approval needed that date may be grant date. Vesting period: Period during which all the specified conditions of the share based payment arrangement should satisfied

5. Fair value and intrinsic value Fair value: Value for which the asset could be exchanged, liability exchanged, or equity instrument granted between willing parties. Intrinsic value Difference between the fair value of shares and the price which counterparty pay for those shares.

6. recognition When entity obtains the goods or services are received. Equity settled share based transaction – increase in equity of the entity. Cash settled share based transaction – liability towards the supplier. Goods and services acquired – treated as expenses, not as assets.

7. measurement Equity settled share based payment transaction Transactions in which services are received Cash settled share based payment transactions

8. Equity settled share based payment transaction How to measure the ‘ COST’ of the goods and services received and equity instruments granted in return . If goods and services received – increase in equity - measure it at the fair value of goods and services received. If it cannot be measured – measure it by reference to the equity instruments granted.

9. continued Party other than employee – fair value measured at the date in which entity obtains the goods or counterparty renders service. Party is an employee – fair value measured on grant date on the basis of employee services by reference to fair value of equity instruments granted. Measurement date is the same as the grant date.