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Cash settled share based payments – example – ACCA (SBR) lectures

VIVA

Reader Interactions

Comments

  1. Kate says

    November 13, 2019 at 6:14 am

    Hello,
    Thank you for the lectures. It really helps a lot!
    Btw, can i ask question 2 and 5?
    i want to know why there is difference between the substracting the leaving directors in q2amnd 5?

    qestion 2: in year 3, the number of directors substracted 4directors in year 2 and then less 1 director.
    but question 5: in year2, again whole number of 10 directors (no impact on leaving directors in year1)

    workings
    In Q2 share-based payments,
    when the 4 directors leave in year 2 and 1in year 3 from 10 directors
    year 2: 20,000 x 60x(10-4)x 2/3
    year3: 20,000x 60x***(6-1)x3/3

    but in question 5 Cash-settled share based payements
    when the 4 directors leave in year 1 and 2 in year2 from 10 directors
    year 2: 20,000 x 80x(10-4)x 1/3
    year3: 20,000x 75x***(10-1)x2/3

    please let me know the reason! Thank you!

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    • deve1206 says

      November 24, 2019 at 5:25 pm

      Hey,

      Yeah I noticed that too. It seems to be a mistake here in lecture to not exclude the directors who left in previous years.

      We have to exclude them.

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      • madziazua says

        November 30, 2019 at 8:19 pm

        The estimated number of directors who would leave has changed. It doesn’t say that the 4 directors left in 2014, the estimate has changed.

      • FedericaBui says

        August 27, 2024 at 6:10 pm

        I think it is not very clear whether the change is only on the estimation or whether they have actually left !

  2. whtan95 says

    July 3, 2019 at 12:48 pm

    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?

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    • hsnkzmi says

      September 24, 2019 at 10:57 am

      Hi.
      Because recording a cash based settlement requires us to record it as a liability, and as such it has to be brought to fv at each reporting date

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