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If the share-based payment transactions provide a choice whether the entity settles in cash or issues equity instruments, the entity is required to account for the transaction as
I. Cash settled share-based payment transaction if and to the extent that the entity has incurred a liability to settle in cash or other assets.
II. Equity settled share-based payment transaction if and to the extent that no liability has been incurred by the entity.
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- In accordance with PFRS 2, Share-based Payment, how should an entity recognize the change in fair value of the liability in respect of a cash-settled share-based payment transaction? Group of answer choices Do not recognize in the financial statements but disclose in the notes thereto. Recognize in other comprehensive income. Recognize in the statement of changes in entity. Recognize in profit or loss.For cash-settled share based payment transactions, until the liability is settled, the entity is required to re-measure the fair value of the liability at each reporting date and at the date of settlement and any changes in fair values are: a. Not recognized b. Included in earnings c. Included in accumulated profits d. Treated as a component of equityProvided the specified vesting conditions, if any, are met, share-base payment arrangement is an arrangement between an entity and another party that entitles the other party to receive - Cash or other assets of the entity for amounts that are based on the price (or value) or equity instruments of the entity and Equity instruments of the e -Cash or other assets of the entity for amounts that are based on the recoverable amount of the Equity Instruments of the entity -Equity Instruments of the entity equal to the monthly compensation of the employee -Equity Instruments of the entity that could be converted into based on the discretion of the employee on or before the vesting period
- A share-based payment transaction with cash alternative whereby the right of choice of settlement is retained by the entity is accounted for as equity-settled cash-settled either cash-settled or equity-settled, but not both partly cash-settled and equity-settled1. Why do standard setters formulate rules on the measurement and recognition of share based payment transactions? 2. What is the difference between equity-settled and cash-settled share-based payment transactions? 3. Distinguish between vesting and non-vesting conditions.1.) When share options issued to employees are exercised, the entity shall: a. recognize a loss for the unamortized balance b. make a transfer among equity components c. recognize a gain for the unamortized balance d. do nothing 2.) A share-based payment transaction with cash alternative whereby the right of choice of settlement is retained by the entity is accounted for as: a. either cash-settled or equity-settled, but not both b. equity-settled c. partly cash-settled and equity-settled d. cash-settled 3.) A share-based payment transaction with cash alternative whereby the right of choice of settlement is given to the employee is accounted for as: a. cash-settled b. either cash-settled or equity-settled, but not both c. partly cash-settled and equity-settled d. equity-settled
- please explain why the option is correct and remaining incorrect Under IFRS 2, with respect to choice-of-settlement share-based payments, if it is the entity that has the right to choose between equity settlement and cash settlement, when must the entity choose the cash settlement? Group of answer choices If the entity has a present obligation to settle in cash If the supplier provides goods The entity always has the option to choose either method. If the supplier provides servicesPlease answer the 3 questions 1. Why do standard setters formulate rules on the measurement and recognition of share based payment transactions? 2. What is the difference between equity-settled and cash-settled share-based payment transactions? 3. Distinguish between vesting and non-vesting conditions.When share options issued to employees are vested prior to the predetermined vesting date, the entity shall A.do nothing B.make a transfer among equity components C.recognize additional expense for the unamortized balance D. recognize a gain for the unamortized balance
- If the employee has the choice as to whether the settlement is in cash or by issuance of equity securities, the share-based payment is accounted as A. A financial liability B. Compound financial instrument C. An equity instrument D. Either equity or financial liability but not bothStatement 1: In the financial settlement of a contingent consideration classified as financial liability, the amount shall be remeasured at fair value with any gain or loss included in profit or loss. Statement 2: If a new entity is formed to issue equity interests to effect a business combination one of the combining entitites that existed before the combination shall be identified as the acquirer. Which statement/s is TRUE?Which of the following statements are true?(i) Equity accounting method is used to account for investor-associate relationship(ii) Full consolidation is used to account for investor-associate relationship.(iii) Equity accounting method is used to account for parent-subsidiary relationship.(iv) The equity accounting method is used to account for investor-joint venture relationship.Select one:a.(i) and (iv) onlyb.(ii) and (iii) onlyc.(ii) and (iv) onlyd.(iii) and (iv) only
