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dear sir
Q:if the vesting conditions are market based and the vesting conditions are met we would account in spl and sfp how?Q:and sir if vesting conditions are market based and we don’t meet the conditions than we ignore the market base and treat as the non market base in financial statements as with example 6 and sir we do it in same way we did in previous examples if it is for three years than we take movement to spl and other to sfp?
Q:but sir you also write in notes that with non market based vesting conditions are taken into account at each reporting period which means FAIR VALUE AT EACH REPORTING PERIOD OR FAIR VALUE AT GRANT DATE?
Hi,
1. If the market based conditions are met then we would account for the issue of shares if equity settled and the payment of cash if cash settled. Have a think about the entries and see how you get on.
2. If we do not meet the vesting conditions then the scheme does not vest and we reverse out the entries previously made. Have a think what entries have been made so you can then think about reversing them.
3. With non-market based conditions, i.e. employees must have worked for a particular length of time, then if it is equity settled we use FV at grant date whilst if cash settled we use FV at reporting date.
There’s a bit for you to think about there but also enough to help you to this point.
Thanks
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