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I am from a country which doesn’t have stock exchange. I don’t understand what is the equity option. Where should I put it in the financial position? In the question provided by my tuition provider, equity option is put in other reserves.
Hmm, it’s an unlikely visitor to an F7 ACCA exam – it’s more a P2 topic. Therefore, very briefly, where options are granted this is a cost to the company that creates a potential obligation. And the value of the equity option involved within a compound financial instrument will be shown within the equity section of the statement of financial position as, typically “Other components of equity”
OK?
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