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Hi Chris. I have a question.
Why would the fair value of equity shared based payment will need to be recorded at grant date
while the fair value of the cash settlement is recorded at reporting date?Can you please explain?
Hi,
Cash settled, we have an obligation to pay cash so we need to measure that obligation at each reporting period which results in an added expense to the company.
Equity settled, we are issuing shares and any changes in the fair value of the shares is a benefit to the employee and so isn’t costing the company any additional expense.
Thanks
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