Cash settled share based payments - example - ACCA (SBR) lectures
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5 Comments
K
Kate·
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!
D
Devender·
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.
F
Federica·
I think it is not very clear whether the change is only on the estimation or whether they have actually left !
T
Tan·
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?
H
Hasan·
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
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!
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.
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?
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