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IFRS 2 , Intrinsic Value

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 2 , Intrinsic Value

  • This topic has 6 replies, 2 voices, and was last updated 2 years ago by Stephen Widberg.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • August 14, 2022 at 3:01 pm #663056
    akka17bakka
    Participant
    • Topics: 105
    • Replies: 99
    • ☆☆☆

    Hello Sir,

    could you kindly explain it to me why intrinsic value would be equal to market value at the vesting date, please?

    Thank you.

    August 17, 2022 at 4:10 pm #663284
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    Not equal. 🙂

    Intrinsic value = market value minus exercise price

    August 17, 2022 at 8:24 pm #663318
    akka17bakka
    Participant
    • Topics: 105
    • Replies: 99
    • ☆☆☆

    I understand that Sir but Kaplan texts is a bit confusing. Please can you explain it to me?

    ”When SARs are exercised, they are accounted for at their intrinsic value at the exercise date. The fair value of a SAR could exceed its intrinsic value at this date. This is because SAR holders who do not exercise their rights at that time have the ability to benefit from future share price rises.

    At the end of the exercise period, the intrinsic value of a SAR will equal its fair
    value. The liability will be cleared and any remaining balance taken to profit or loss.”

    Thank you.

    August 18, 2022 at 7:20 pm #663394
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    Main point is that during exercise period FV will be greater than INTRINSIC VALUE. Remember from FM that options etc have time value as well

    I’m sure you wouldn’t need to write the sentence in the exam.

    August 18, 2022 at 7:20 pm #663395
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    Main point is that during exercise period FV will be greater than INTRINSIC VALUE. Remember from FM that options etc have time value as well

    I’m sure you wouldn’t need to write the sentence in the exam.

    August 23, 2022 at 8:11 pm #664096
    akka17bakka
    Participant
    • Topics: 105
    • Replies: 99
    • ☆☆☆

    Thank you. God bless.

    August 24, 2022 at 5:44 pm #664163
    Stephen Widberg
    Keymaster
    • Topics: 16
    • Replies: 3411
    • ☆☆☆☆☆

    🙂

  • Author
    Posts
Viewing 7 posts - 1 through 7 (of 7 total)
  • The topic ‘IFRS 2 , Intrinsic Value’ is closed to new replies.

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