Corporation:m a y i s s u e i t s o w n s h a r e s i n e x c h a n g e f o r n o n c a s h

c o n s i d e r a t i o n ( n o n c a s h a s s e t s o r services)

Corporation Code of the Philippines:

prohibits the issuance of shares in exchange for promissory notes or future services

the consideration must be received first or the services must have been rendered
first before shares are issuedthe value of the consideration received must not
be less than the par value or issued value of the shares

Accounted for under PFRS 2:transactions involving the issuance of shares

inexchange for noncash consideration

SHARE-BASED PAYMENT TRANSACTIONSa transaction in which the entity

acquires goods or services and pays for them by issuing its own equity instruments
or cash based on the value of its own equity instrumentstypes:1)Equity-settled
share-based payment transactionone in which the entity receives goods or
services and pays for them by issuing its shares of stocks or share options2) C a s h -
s e t t l e d s h a r e - b a s e d p a y m e n t transactionone in which the entity receives
goods or services and incurs an obligation to pay cash at an amount that is based on the
fair value of its own equityinstruments3) C h o i c e b e t w e e n e q u i t y - s e t t l e d a n d
cash-settledone in which the entity receives goods or services and either the entity or
the counter party is given a choice of settlement in the form of equity instruments or
cash based on the fair value of equity instrument Equity instrument:a contract that
evidences a residual interest in the assets of an entity after deducting all of its
liabilities PFRS 2applies to all entities, including subsidiaries using their
parent’s or fellow subsidiary’s equity i n s t r u m e n t s a s c o n s i d e r a t i o n f o r
g o o d s o r s e r v i c e s , a n d t o a l l s h a r e - b a s e d p a y m e n t arrangements
except the following:a)transactions with owners (including employees who
are also shareholders)acting in their capacity as owners b)business
combinationsc)i s s u a n c e o f s h a r e s a s s e t t l e m e n t o f forward contracts,
futures, and otherderivative instrumentsRECOGNITIONg o o d s o r s e r v i c e s
a c q u i r e d i n s h a r e - b a s e d payment transactions are recognized when theg o o d s
a r e r e c e i v e s o r a s t h e s e r v i c e s a r e receivedgoods or services received that
do not qualify asassets are recognized as expensesThe entity recognizes:1)a
corresponding increase in equity if the goodsor services are received in an
equity-settled share-based payment transaction2)a liability if the goods or services
are acquired ina cash-settled share-based payment transaction
I.EQUITY -S ETTLED SHARE-BAS ED
PAY MENT TRANSACTIONSA.Measurement of transactionNon-
employees:→g o o ds o r s e r v i c e s r e c e i v e d f r o m equity-settled share-based
paymenttransactions with non-employeesare measured at the fair value
ofthe goods or services received( i f n o t d e t e r m i n a b l e , a t t h e f a i r v a l u e o f
t h e e q u i t y i n s t r u m e n t s granted)