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What are the argument for and against having share based payments as an expense and does the argument against apply to cash settled payments also?
Hi,
Argument for is that if an employees is providing a service to the company then an expense should be recognised. It also ensures comparability between entities as the same accounting treatment is adopted.
Against is that there is a double hit on earnings per share. The earnings are reduced by the expense recognised whilst the number of shares will also increase.
Hope this helps.
Thanks
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