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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › IFRS 2, Market based vesting conditions.
Hello Tutor,
could you kindly explain this statement to me. How are these conditions incorporated in fair value of the instruments?
”Market-based vesting conditions
”• These conditions are already considered when calculating the fair value of equity
instruments at the grant date.”
Thank you.
When you use an option valuation model account is taken of the volatility of share price (Betas and all that). You would learn about it if you study APM.
🙂
Okay, so for SBR it is enough to know that market conditions are already incorporated in the fair value of the equity instruments?
Thank you.
Yes, that’s all. Perfect.