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Ind AS 102 - Share Based Payment - Questions

The document contains questions related to accounting for share-based payment transactions under Ind AS 102. It includes questions on equity-settled and cash-settled share-based payments with and without service conditions, share-based payments with cash alternatives, and share-based payments for goods/services.

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Kashika Agarwal
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149 views

Ind AS 102 - Share Based Payment - Questions

The document contains questions related to accounting for share-based payment transactions under Ind AS 102. It includes questions on equity-settled and cash-settled share-based payments with and without service conditions, share-based payments with cash alternatives, and share-based payments for goods/services.

Uploaded by

Kashika Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Ind AS 102 -Share Based Payment-Questions

Q 1 -An entity issued 100 shares each to its 1,000 employees subject to service condition of
next 2 years. Grant date fair value of the share is INR 195 each. At end of 1st year, there is an
expectation that 97% of the total 1,000 employees will remain in service till the end of vesting
period. However, at the end of 2nd year the expected employees to remain in service would
be 91% out of the total 1,000 employees. Calculate expense for the year 1 & 2.

Q 2 An entity issued 50 shares each to its 170 employees subject to service condition of next
2 years. The settlement is to be made in cash. Grant date fair value of the share is INR 85 each,
however, the fair value as at end of 1st year, 2nd year were INR 80 & INR 90 respectively.
Calculate expense for years 1 and 2

Equity-settled share-based payment transaction with a service condition


Q 3. -ABC Limited granted to its employees, share options with a fair value of Rs. 5,00,000 on 1st
April, 20X0, if they remain in the organization upto 31st March, 20X3. On 31st March, 20X1, ABC
Limited expects only 91% of the employees to remain in the employment. On 31st March, 20X2,
company expects only 89% of the employees to remain in the employment. However, only 82% of
the employees remained in the organisation at the end of March, 20X3 and all of them exercised
their options. Pass the Journal entries.

Q 4 -On 1st January Year 1, Company B grants one share option to each of its 100 employees in a
share-based payment transaction, subject to a three-year service condition. If the service condition
is met, then the employees can exercise their option at any date in Year 4 at an exercise price of
Rs. 50 per share. On grant date and at the end of each year, B estimates the number of employees
expected to have satisfied the service condition at 31st December (Year 3) and the number of
instruments expected to vest are given below-
Estimate of instruments Number of employees on date
expected to vest of estimate
1 January Year 1 90 100
31 December Year 1 80 92
31 December Year 2 75 77
31 December Year 3 70 70
All 70 employees who meet the service condition on 31 December Year 3 exercise their options in
Year 4. The fair value of a share on the grant date is Rs. 59. Face Value of Share is Rs. 10.
Cash Settled Shared Based Payment vest immediately (No service Condition)
Q 5 MINDA issued 11,000 share appreciation rights (SARs) that vest immediately to its
employees on 1 April 20X0. The SARs will be settled in cash. Using an option pricing model, at
that date it is estimated that the fair value of a SAR is Rs. 100. SAR can be exercised any time
until 31 March 20X3. On 31 March 20X1, it is expected that out of the total employees, 94% will
exercise the option. On 31 March 20X2, it is expected that out of the total employees, 91% will
exercise the option. Finally, when these were vested i.e. at the end of the 3rd year, only 85% of
the total employees exercised the option. Pass the Journal entries.
Fair values at the of Year Rs.
31-Mar-20X1 132
31-Mar-20X2 139
31-Mar-20X3 141

Share-based payment with cash alternative


Q 6 At 1 January 20X1, Ambani Limited grants its CEO an option to take either 990 shares or to
take the cash amount equivalent to 800 shares. The minimum service requirement is 2 years.
There is a condition to keep the shares for 3 years if shares are opted.
The face value of shares is Rs. 100 per share.

Fair values of the shares Rs.


Share alternative fair value (with restrictions) 212
Grant date fair value on 1 January, 20X1 213
Fair value on 31 December, 20X1 220
Fair value on 31 December, 20X2 232

Suggest the accounting & reporting treatment for all three years-
When, at the end of year 2, the employee chooses:
Scenario A: The Cash Alternative; Scenario B: The Equity alternative
Q 7 An enterprise grants to an employee the right to choose either a cash payment equal to the value
of 1,000 shares, or 1,200 shares. The grant is conditional upon the completion of three years’ service.
If the employee chooses the equity alternative, the shares must be held for three years after vesting
date. The face value of shares is Rs. 10 per share.
At grant date, the fair value of the shares of the enterprise (without considering post-vesting
restrictions) is Rs. 50 per share. At the end of years 1, 2 and 3, the said fair value is Rs. 52, Rs. 55 and
Rs. 60 per share respectively. After taking into account the effects of post vesting transfer
restrictions, the enterprise estimates that the grant date fair value of the equity alternative is
Rs. 48 per share.
Suggest the accounting & reporting treatment for all three years-
When, at the end of year 3, the employee chooses:
Scenario A: The Cash alternative Scenario B: The Equity alternative

Share-based payment - Purchase of goods/Assets


Q8
Indian Inc. issued 995 shares in exchange for purchase of an office building. The title was transferred
in the name of Indian Inc. on Feb 20X1 and shares were issued. Fair value of the office building was
INR 2,00,000 and face value of each share of Indian Inc was INR 100.
Pass the journal entries.

Share-based payment – Services


Q9
Reliance limited hired a maintenance company for its oil fields. The services will be settled by issuing
1,000 shares of Reliance. Period for which the service is to be provided is 1 April 20X1 to 1 July 20X1
and fair value of the service was estimated using market value of similar contracts for INR 1,00,000.
Nominal value per share is INR 10. Record the transactions

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