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Equity settled share based payments – service – ACCA (SBR) lectures

VIVA

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  1. Hi Chris
    Why does the equity increase in the first example.. (from 800000 to 1600000), but in the second example, it’s not the sum of the current estimate and the one from the year prior

    (ie. I dont understand why it doesn’t go from 2,400,000 to 9600000 (24m plus 72m))?

  2. Hi Sir,
    I have a question concerning equity settled share based payment
    What happens if for example:
    Let us assume that the vesting period is 3 years. At grant date, company has 50 employees.
    At the grant date, the company has estimated that 10 employees would leave.
    At the end of the first reporting date, the calculation would be as follows : (50-10) x Fair value x No of shares
    Let’s say that during the 2nd year, actually 5 employees left the company and the latter revises its estimates to say that approximately 15 would leave.
    How do we deal with that? Do we use only expected no of employees or do we consider the actual leavers as well?

  3. Hi Sir,
    I have a question concerning equity settled share based payment
    What happens if for example:
    Let us assume that the vesting period is 3 years. At grant date, company has 50 employees.
    At the grant date, the company has estimated that 10 employees would leave.
    At the end of the first reporting date, the calculation would be as follows : (50-10) x Fair value x No of shares
    Let’s say that during the 2nd year, actually 5 employees left the company and the latter revises its estimates to say that approximately 15 would leave.
    How do we deal with that? Do we use only expected no of employees or do we consider the actual leavers as well?

  5. Thank you so much for the lectures! Quick question on example 2, the first year the number of directors were 6 (10-4). On the second year one leaves so I assumed the number of directors would be 5. The example states 10-1. Do we assume the other directors were replaced and entitled to the same scheme? Thanks!

      • The estimate will change at the end of each year in 2014 and 2015.

        In example 2:
        The management made an estimation at the end of the year 2014 that 4 directors would leave before the end of the three years.
        So the calculation is based on 10-4=6 directors.

        At the end of the year 2015, the estimation changed, only 1 director would leave before the end of the three years, the other 3 directors changed their mind. (The reason is the economic downturn, not easy to find another job if they leave.)
        So the calculation is based on 10-1=9 directors.

        I hope it helps.

  7. Are u going to upload new videos for this tho? any new videos coming before the second week of jan? i wish you watched the videos first before upload or put a disclaimer where it was wrong. because im replying solely on your videos and open tuition for with study text to learn.

    • Hi,

      We’ll upload the new videos once I’ve the time to be able to re-record them. The videos are fine and the odd mention of P2 as the exam should not cause you any big issues.

      Thanks

  8. Hello,
    Could you please explain why do we value goods @ FV of options in example 3 of the lecture, but then in the following lecture (Chapter 14, lecture 3) we value it at FV og goods?
    They are two identical examples. Many thanks in advance.

    • Hi,

      We need to edit out the end of this video, so ignore anything after the 12:55 point as I got excited and made a slight mistake.

      If the options are in return for goods then they are valued at the fair value of the goods.

      Thanks

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