ACC 109: Intermediate Accounting | ea ‘SHARE BASED PAYMENTS. ‘onceptual: Multiple C ‘A share-based payment transaction may be a. equiy-setted 7 b. cash-settled c Bane ‘counterparty s given the choice of settlement between equity or cash payment. ~~ ‘any of the é (C2. When a share-based payment transaction is with a non-employ ‘a. Fair value of the goods or services received b. Fair value of the equity instrument granted ©. Choice (a) except when this cannot be determined reliably, then the goods or services received are measured using the goods or services received are measured at the choice (bl) d. aor bat the option of the entity . {2 3. Intrinsic value is ‘a. Subscription price minus fair value of shares 'b. Fair value of share minus subscription price FV SP cc. Subscription price minus fair value of share options 4. Fairvalue of share options minus subscription price A, 4. Meastrement date is the date at which the fir value ofthe equity instruments granted is measured forthe purposes of PFRS 2 |. For transactions with non-emplayees, the measurement date is the 4% Ii, For transactions with employees and others providing similar services, the measurement date is th ee ee rae tales nerFalee Tus a ole, tale D5. Which of the following statements is incorrect? ‘@. Share-based co ion plan is a form of additional remuneration glven to an employee in return for services rendered which may be equity-set mare ton sir), Cash-stled(shate appreciation Tats) or a.compensation plan with a choice of setfement vefweerrequity and cash payment. 'b. “corporation often grants share options to management personnel as additonal compensation. — ¢. Equity-setied share-based payments are recognized as increase in equity while Cash-settled share-payments are recognized as li a : 4. Equily-cetled share-based payments are recognized as expense while Cash-settled share-payments are (fot ) recognized as expense. ear ale D6. Ashare-based payment transaction is one in which an entity eceives goods or services and pays for them a. by issuing its own equity instruments, ——~ through cash, but the amount is based on the fair value of the entity's equity instruments. — either a orb, asa choice given to either the entity or the supplier of the goods or services ——~ b 4. ahy of these s~ 7. Which ofthe following is excluded from the scope of PERS 22. ‘a. Employee share option plans b. Employee share appreciation rights ‘G Purchase of goods from an unrelated party in exchange for an entity's own shares of stocks d._Transfer of equity instruments as consideration for @ BUSINESS B) 8 On February 1, 20x, Entity A offered share options subject to the offer being ratified in the shareholders’ general, ‘meeting. The share option offer was gprovedn the shareholders’ general meeting held on March 1, 20c1, Entity A issued the share options on April 1, 20x1. The air value of the share options vary between these dates. For purposes of PFRS 2, the share ‘options should be valued at the fair value determined on gront dok ¢ MV a. February 1, 20x1 April 1, 2x1 oprovel March 1, 20x1. any of these eae C9 Ondanuary 1,204, Entity A has granted 690 share options to each ofits 10.employees, The options vest in tree years} time Each share option has a fair value of P100 on grant date. Information on émployee departure is as follows: January 1, 20x4: estimate of employees leaving the entity during the vesting period ~ 4% December 31, 20x: revision of estimate of employees leaving to 5% before vesting date December 31, 20x5: revision of estimate of employees leaving to 6% before vesting date December 31, 20x6: actual employees leaving 5% How much is the salaries expense in 20:5? o \ ror “4 (0% (00445"/) x00 ¥ \qook b. 1,900,000 45 YOO» (100x444) XID x2 -Y, “CBO « 1860,000 i ¢ aso000 AL (00 % (00 4.454.) X10 *3}3-y) -Yy Use the following information forthe next two questions:PHINMA EDUCATION ACC 109: Intermediate Accounting Entity A's employ ver the next’3 yea The fair value ofeach share option i On the bass ofa weighted average probably Entity A estimates on Januar T,20x1 that about 20 employees (Le, 20% oF 20 out of the 100 employees) will leave during the three-year period and therefore forfeit their rights to the share options. During 20x, 7 employees left Entity A revises its estimate toa total of 25% employee departure over the vesting period During 20x2, 9 employees left. Entity A revises its estimate to a total of 28% employee departure over the vesting period. During 20:3, 8 employees left. Therefore, the actual employee departure over the past three years is 2436 (7+ 9+ 8) + 100) (On January 1, 20x1, Entity A grants 100 share options to each of its 100 key on conditional upon each employee remaining in 15, (1 Howmuhis te sores erpnse 2027 x4 loo « Coox757.) 15 ¥ My = 9 THO b. 37,500 x2 WO x (Ioer2/)x Sx 7/,-y, = 250 «34500 ; 42000 43 MO < (10K) ¥ 15 « y Ye-Yy = 1000 D1, How much is the salaries expense in 20:3? a 33700 b. 37,500 «34500 4. 42,000 J), 12. According to PFRS 2, when the intrinsic value is used, 2. the equity instruments granted ae initially and subsequently measured at ther intrinsic value. Changes in intrinsic value are recogrized in profit or loss. — b. the equity instruments granted are initially measured at their intrinsic value. Changes in intrinsic value are not recognized. the equity instruments granted are initially and subsequently measured atthe are recognized in equity. 4. the entity cannot use intrinsic value in measuring equity instruments granted under share option plans {% 13: According to PFRS 2, if an entity used the intrinsic value after vesting date, a. any change in intrinsic value is ignored. b. the change in intrinsic value is recognized as an expense until the share options are fully exercised or otherwise forfeited. ~ the change in intrinsic value is recognized directly in equity until the share options are fully exercised or otherwise forfeited, 4. the entity cannot use intrinsic value in measuring equity instruments granted under share option plans. | 14. On February 1, 20x1, Entity A offered its@mployees share options subject to the offer being ratified in the shareholders’ general meeting, The share option offer was-a@prove'in the shareholders’ general meeting held on March 1, 20x. Entity issued the share options on April 1, 20x. The fairvalue ofthe share options vary between these dates. For purBOseS Gt PFRS 2, the share trinsic value. Changes in intrinsic value ‘options should be valued at the fair value determined on von ore HU ‘a. February 1, 20x1 ©. April 1, 20x1 March 1, 20x 4. any of these APyov a. A 15. These are transactions in which the enti receives goods or services as consideraion Jorceqly WsTUMEMIS the ently, including shares and share options 2. Equiy seed share-based payment transactions 1. Cash settled share-based payment transactions ~ © Equity payment transactions @. Cash payment transactions. ~ [3 16. These are transactions in which the entity acqUires 900d or seivicesby incurring labillies to the supplier of those goods or services for amounts that aré based on the price of the entiy’s shares and othe equiy instruments '2. Equi transactions — San b. Cash settled share-based payment transactions.“ TY of 1 gronkd Purchase transactions 4. Cash payment transactions C17. For equity yslled_share_based_ payment ansacons, the ently shall measure the goods_or_tecs received an he corresponding increase in equity Y Cee (Direct at air vlue of Tis goods or service received ti Inde by velorence le he flr value of the equty Instruments granted, ifthe fir value of the goods or services teceWed carne be estinatedreeby. = Tonly b. Honly ©. Both and Neither nor [_ 18. For cash settied share-based transactions, te 2. fairvalue ofthe goods and services received. b. fair value of the liability. an entity shall measure the goods or services received and the labilly incurred atPHINMA EDUCATION ACC 109: Intermediate Accounting ‘c._either the fair value of the goods or services received or the fair value of the liability, 4. neither the fair value of the goods or services received, nor the fair value ofthe liability 49. For cash settled_share-based payment transactions, unti the liabilty is settled, the entity is required toemeasure the fait value of the liabilty of each reporting date and the date of selement and any changes in fair value are ‘@. Recognized in profit or loss for the period ~~ 'b. Included in retained earnings c. Treated as component of equity d._Not recognized 20. 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 — |. Cash settled share-based payment transaction if and to the extent that the entity has incurred a liabilty to settle in cash or other assets. TI” Equity settled share-based payment transaction if and to the extent that no liability has been incurred by the entity._— 2. Lonly ». Honiy 6. Ether ort 4. Neither no 21. eth dae on which he erty rd ante gay set sare aymentarangenen, beng when the ely and the counter party have sha rstanding of the terms and condtions of the rangement o. Grant aate Bb. Measuremert date © Exercise date &._ Balance sheet dete 22 Measurement date is the date on which the fair value of the eqully instrumen-oranted is measured. What is the ~qreasutereri date for share-baved payment transactions? — Meee eee era rearkg tinier aivioen the essere dais no TD (7 Ii. For transactions other than employees, the measurement date fs'the date the entity oblaine te goods or the counter pty fendors sonore bree @. tonty B. Won © Both and Gi. Nether nor 23, For puposes of share-based payment transactions, a Sicad featur? is Pian arangement that provides for an automatic grat of additonal share options whenever he option holer exercises previously granted options using the eniy’s shares, rather than cash, to sail the exerlse price naw shate option granted when share used fo satay the exercise pie of previous share option GA contact that gives the holder the igh but not the obligation to subscribe to the enllys shares al a fxed or Geterminsbe price fora specified period of time 4. eontrat thet ondnces a residual inerest inthe asses of an ently afer deducting alls abiesPHINMA EDUCATION oes ACC 109: Intermediate Accounting CC. —} Anentis: as granted share options to ts emplovees. The total expense tothe sazaing date of Serentes SRD hasbeen aeaned a Beige ‘The entity has testes eet award tarls. on December 31.2035. The expense cKarged inthe income statement since he grant date of January 3, 20X3, had been vear to December 31, 20X3-$5 mul, and year se Dssemtes 31 30g. RET od The expense that would have been changed in the year to December 31,2043, seHlement STS nat would be the expense charged in the income statement forthe year eKG Deceriber 3, 2005 au SSimain Peeion 33min 42min (3H) ] 3.94 Lie he fling information fr en gusto ¢20 (On January 1, 20x, Golf View Village Co. grants 1,000 share options to each of its 180 emplovees on condition that the emplovees remain in Golf Viet's employ until the end of 20.3. The exereze price per share option is P20. The fair value per share option. “D) Dye was (On December 31, 20s1, Golf View modifies the share option grant by reducing the exercise price to (P60, This resulted to an increase in the fai value per option before the modification of P100 to P120 iter the moditication on 7 - JO ynorwease 6D , be : Wl modifieahon 2. What amount of compensation expense shall be recognized in . A 2.400.000 3600000 « 1600000 x1 000x180 xB0r"/o= 4@00K oe ; we 7 4 2,6)000 +180 x0092)5 “Y \Vhat amount of compenation expense shall be recognized in 2042 uo Ronis OF rons SUES Ta a Satis “eolboxt@ #200") te eng aomaton ne nett uetions On anvary out Creek Co. grant L000 sare options to each oft: 0emplovees on condition Sha the explopees seman in Cre employ ni Se end of 2063, The exercee pce per share option P28. The aval per sare option GHED) hung Con Decent 31, 20M, Creek Co. moses the share option grant br extending the vesting peed to the end of 204 G nal vencfici el A. wnatamount of compeneation expense shallberezognzed in 20x? 2 4800,000 3600000 < 1800000 4. 1.200.000 A 3. What amount of compensation expense shall be recognized in. a. £800,000 ‘6,600,000 «.2.400,000 1,600,000 x4 toon xteo xan xy ~ 4e00K KZ (poo N120480 oY = AQIDK