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Muslim Farooque
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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?
P2-D2
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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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