PSAK 53

SHARE-BASED PAYMENT

THINGS ARE ARRANGED

PSAK 53 is a statement of accounting standards applied to stock-based payment

transactions when an entity obtains or receives goods or services.

STANDARD STATEMENT

Statement of Financial Accounting Standards 53: Share-Based Payments consist of

paragraphs 01-64 and Appendix. PSAK 53 is accompanied by an Implementation Manual that
is not part of PSAK 53. All paragraphs in this PSAK have the same governing power.
Paragraphs printed in bold and italics set the main principles. PSAK 53 must be read in the
context of the objectives of the arrangement and the Basic Framework for the Preparation and
Presentation of Financial Statements. PSAK 25: Accounting Policies, Changes in Accounting
Estimates and Errors provide the basis for selecting and implementing accounting policies
when there are no explicit guidelines. This statement is not required to be applied to elements
that are not material.

PRELIMINARY

The purpose of this statement is to regulate the financial reporting of entities that carry
out stock-based payment transactions. Specifically, this statement requires an entity to present
in the income statement and statement of financial position the impact of share-based payment
transactions, including costs associated with the transaction to provide stock options to
employees.

The scope of this statement is that the Entity applies this PSAK to accounting for all
stock-based payment transactions, whether the entity can specifically identify some or all goods
and services received, including: Stock-based payment transactions with the settlement of
equity instruments, Stock-based payment transactions with settlement cash, and Transactions
where an entity receives or obtains goods or services and the terms of the agreement provide
an option for the entity or supplier of goods or services regarding the completion of the
transaction whether with cash (or other assets) or with the issuance of equity instruments.
PSAK 53 also uses the term "fair value" in different ways in some ways from the definition of
fair value in PSAK 68: Fair Value Measurement. Therefore, when applying PSAK 53 the entity
measures fair value according to PSAK 53 instead of PSAK 68.

There are several definitions in this statement, namely:

a. An equity instrument is a contract that shows the existence of residual rights to the assets
of an entity after deducting all of the liabilities of the entity.
b. Equity instruments granted are rights (with or without conditions) on an entity's equity
instrument granted by that entity to another party in a share-based payment agreement.
c. Vesting conditions are conditions that determine whether an entity receives services that
provide the counterparty with the right to receive cash, other assets or equity instruments
of the entity, in a share-based payment agreement.
d. The condition of market performance vesting is a condition related to the market price of
an entity's equity instrument which is a price requirement for the execution, vesting, or
exercisability of an equity instrument, such as the achievement of certain prices of shares
or certain intrinsic value of stock options, or the achievement of certain targets which is
based on the market price of an entity's equity instrument relative to the market price index
of another entity's equity instrument.
e. Intrinsic value is the difference between the fair value of shares, with which the
counterparty has the right (with or without conditions) to order or accept, and the price (if
any) on which the counterparty is required (or will be required) to pay for the stock.
f. Fair value is an amount by which an asset can be exchanged, a liability can be settled, or
the equity instrument provided can be exchanged between parties who understand and wish
in a reasonable transaction.
g. The addition option is a new stock option that is granted if the stock is used to fulfill the
exercise price of the previous stock option.
h. Stock options are contracts that give the holder the right, but not the obligation, to buy an
entity's shares at a certain price or that can be determined for a certain period of time.
i. Share-based payment arrangements are agreements between entities (or groups of other
entities or each shareholder of each group of entities) and other parties (including
employees) that cause other parties to receive (a) cash or other assets of the entity for an
amount based on price ( or the value of an equity instrument (including shares or stock
 options) another entity or group of entities, or (b) an equity instrument (including shares or
stock options) another entity or group of entities, if certain vesting conditions are met.
j. The vesting period is the period during which all vesting conditions specified in the share-
based payment agreement must be fulfilled.
k. Stock-based payment transactions are transactions in which the entity: (a) receives goods or
services from the supplier of the goods or services (including employees) in a share-based
payment arrangement, or (b) creates an obligation to complete transactions with suppliers
in a stock-based payment arrangement if another group of entities receives said goods or
services.
l. Stock-based payment transactions settled with equity instruments are stock-based payment
transactions settled with equity instruments: A stock-based payment transaction where an
entity (a) receives goods or services in return for its equity instruments (including shares
and stock options), or ( b) receive goods or services but have no obligation to complete
transactions with suppliers.
m. Share-based payment transactions settled with cash are stock-based payment transactions
where an entity obtains goods or services by creating a liability to transfer cash or other
assets to the supplier of the goods or services at an amount based on the price (or value) of
equity instruments (including shares and stock options) entity or group equity instruments.

RECOGNITION

An entity recognizes goods or services received or obtained in a stock-based payment

transaction at the time the goods are received or when the service is received. An entity must
also recognize an increase in the related equity value if goods or services are received in a
stock-based payment transaction that is completed with an equity instrument, or an increase in
the value of liabilities if the goods or services are obtained in a stock-based payment transaction
that is settled with cash. If the goods or services received or obtained in a share-based payment
transaction do not meet the recognition qualifications as assets, then the goods or services are
recognized as an expense.

STOCK-BASED PAYMENT TRANSACTIONS ARE COMPLETED WITH EQUITY

INSTRUMENTS

For stock-based payment transactions that are completed with an equity instrument, the
entity measures the goods or services received and the related increase in equity, directly, by
referring to the fair value of the goods or services received, unless the fair value cannot be
estimated reliably. If an entity cannot estimate the fair value of goods or services that are
received reliably, then the entity must measure the value of the goods and services and the
related increase in equity, indirectly by referring to the fair value of the equity instrument given.

In the case that there is no evidence to indicate the situation but on the contrary, the
entity must assume that the services provided by the counterparty are counted in return for the
equity instruments received. In this case, the entity must recognize the services received in full
at the amount of the related increase in equity.

For transactions measured by reference to the fair value of the given equity instrument,
an entity must measure the fair value of the equity instrument given at the measurement date
based on market price if available, taking into account the terms and conditions of the equity
instrument.

Providing equity instruments with market performance vesting conditions, the entity
must recognize goods or services received from counterparties that have fulfilled all other
vesting conditions (for example services received from employees who continue to work for a
certain service period), regardless of whether the performance vesting conditions the market is
fulfilled.

For the delivery of equity instruments with non-vesting conditions, the entity must
recognize goods or services received from counterparties that have fulfilled all vesting
conditions that are not vesting conditions of market performance (for example services
received from employees who remain working for a certain period of work), without regard to
whether the non-vesting conditions have been met.

For options with add-back features, those features should not be considered when
estimating the fair value of an option given on the measurement date. Instead, the re-add option
must be counted as granting a new option, if and when the subsequent re-add option is given.

After recognizing the goods or services received in accordance with the paragraph and
related increase in equity, the entity may not make an adjustment to total equity after the vesting
date. For example, an entity may not reverse the amount recognized for services received from
employees if the vested equity instrument then becomes forfeited, or in the case of stock
options, the option is not exercised.

In rare cases, an entity may not be able to estimate the fair value of an equity instrument
that is reliably awarded at the measurement date, in accordance with the provisions.
 An entity may modify the terms and conditions for the provision of equity instruments.
For example, an entity can reduce the exercise price of an option given to an employee (ie
redefine the price of an option), which increases the fair value of the option. The provisions in
paragraphs 27-29 for calculating the impact of the modification are stated in the context of
stock-based payment transactions with employees. However, this requirement must also be
applied to share-based payment transactions with parties other than employees as measured by
reference to the fair value of the equity instruments provided.

STOCK-BASED PAYMENT TRANSACTIONS ARE COMPLETED WITH CASH

For stock-based payment transactions settled with cash, the entity must measure the goods or
services obtained and the liabilities incurred at the fair value of the liability. Until the liability
is settled, the entity must measure the fair value of the liability at the end of each reporting
period and at the settlement date, where any changes in fair value are recognized in the income
statement for the period. For example, an entity might give employees the right to increase
stock prices as part of a remuneration package, where employees will get the right to receive
cash payments in the future (and not equity instruments), based on an entity's stock price
increase of a certain level over a certain period of time. Or the entity may give employees the
right to receive future cash payments in the form of rights to shares (including shares to be
issued due to the execution of stock options) that can be redeemed, either because they are
required (for example due to termination of a work contract) or at the employee's choice.

SHARE-BASED PAYMENT TRANSACTIONS WITH CASH CHOICE

For stock-based payment transactions where the regulatory requirements give an entity or party
the opposite option to complete the transaction whether it will be settled with cash (or other
assets) or with the issuance of an equity instrument, the entity must record the transaction or
component of the transaction as a share-based payment transaction with cash settlement, if and
to the extent that the entity has incurred liabilities to be settled with cash or other assets, or as
a stock-based payment transaction with equity instruments completed if and throughout, no
liabilities have arisen.

a. Share-Based Payment Transactions with Regulatory Requirements That Provide

Settlement Options to Opponents
If an entity gives the right to an opposing party to choose a stock-based payment
transaction to be settled by cash or by issuing an equity instrument, then the entity has
provided compound financial instruments, which include the debt component and the
 equity component. For transactions with parties other than employees, where the fair
value of the goods or services received is measured directly, the entity measures the
equity component and compound financial instruments at the difference between the
fair value of the goods or services received and the fair value of the debt component,
on the date the goods or services are received.
b. Share Based Payment Transactions with Regulatory Requirements that Provide Entity
Settlement Options
For stock-based payment transactions whose regulatory requirements provide a
preferred entity to be settled with cash or by issuing an equity instrument, the entity
determines whether the entity has a current obligation to settle with cash and records
stock-based payment transactions appropriately. An entity has a current obligation to
settle with cash if the choice of settlement with an equity instrument does not have a
commercial substance, or the entity has past practices or written policies regarding
settlement with cash, or in general resolves with it if the opposing party requests
settlement with cash.

STOCK-BASED PAYMENTS FROM ENTITIES

For share-based payment transactions between groups of entities, in separate or individual

financial statements, entities that receive goods or services recognize goods or services
received as share-based payment transactions that are settled with equity instruments or settled
with cash by assessing:

a) The nature of the award given

b) Rights and obligations of the entity

The amount recognized by an entity that receives goods or services may differ from the
amount recognized by a consolidated business group or by another group of entities
that completed a stock-based payment transaction. An entity that receives goods or
services measures goods or services received as a share-based payment transaction that
is completed with an equity instrument if:

a) The award given is an equity instrument issued by an entity or

b) The entity has no obligation to complete stock-based payment transactions.

The entity then measures the stock-based payment transaction which is completed with
the equity instrument only for changes in non-market vesting conditions in accordance
 with the previous explanation. In other cases, entities that receive goods or services
measure the goods or services as stock-based payment transactions that are settled with
cash.

DISCLOSURE

The entity discloses information that enables users of financial statements to understand the
nature and extent of stock-based payment arrangements that are for the period. To have an
impact on the application of the principle of explanation before the entity discloses at least the
following:

- A description of each type of stock-based payment arrangement that exists at any time
during the period, including the general terms and conditions of each arrangement
- Number and weighted average price of stock option execution for each group of options
- For stock options outstanding at the end of the period, the range of the exercise price
and the weighted average remaining life of the contract.

The entity also discloses information that enables users of financial statements to understand
how the determination of the fair value of goods or services received or the fair value of an
equity instrument provided during the period. And the entity also discloses information that
enables users of financial statements to understand the effects of stock-based payment
transactions on the entity's profit and loss during the period and on its financial position.

TRANSITIONAL PROVISIONS

For the transitional provisions for share-based payment transactions that are settled with equity
instruments, the entity applies this PSAK for the giving of shares, or other equity instruments
given after January 1, 2012 and has not vest as of the effective date of this statement. An entity
is recommended, but not required, to apply this PSAK, another gift from an equity instrument
if the entity has published the fair value of the equity instrument determined at the measurement
date. For all equity instruments that apply this PSAK, restatement of comparative information
and, if applicable, adjust at the beginning of the serving period. For all equity instruments that
have not applied PSAK as an example of an equity instrument given on or before January 1,
2012 the entity must remain disclose the information required in paragraphs 44 and 45.

EFFECTIVE DATE
The entity applies this statement for the financial year period beginning on or after January 1,
2012. Early application is permitted. This is applied prospectively for the financial year period
beginning on or after January 1, 2015.

WITHDRAWAL

Overriding PSAK 53: Stock-based Compensation Accounting

BASIC ACCOUNTING CONCEPTS ARE APPLIED

There are several basic concepts applied in PSAK 53, namely:

a. The Concept of Recognition

This concept emphasizes when and how an economic event is recognized. In PSAK 53
paragraphs 07-08 describe how the recognition of goods or services received in stock-based
payments and the related increase in equity if the goods or services are received

b. Base Measurement

In the measurement used in accounting, there are several kinds of measurement methods such
as cost of goods, market price, the lowest price between the base price and market price,
realized price and others. In PSAK 53 paragraph 10, it is regulated that when a stock-based
payment transaction occurs, the main focus is the fair value of the goods or services received
by the company. Meanwhile, if the fair value of goods or services cannot be measured reliably,
then the fair value of equity instruments is used as a basis for presentation, measurement and
disclosure in financial statements.

c. Consistency

This concept leads to instructions so that entities using the same accounting method every
period for the purpose of uniformity also compare. In PSAK 53, it is required to use a valuation
model that is consistent with generally accepted financial instrument pricing methods and must
include all factors and assumptions that will be considered by market participants who are
knowledgeable in setting prices. Example of the model are Black-Scholes and Binomial.