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Hi sir I have few things to clarify
Do we need to analyze here whether share based payment after acquisition falls under consideration or remuneration.
As I was doing this question my first conclusion was it is additional consideration for the subsidiaries for acquisition of control as it vest immediately and there is no service condition attach. is this wrong?
It would be good to explain the argument about whether this is consideration or remuneration.
I don’t think that the seller of the company is getting any benefit so I think this will come on the ShareBase pay. There is no vesting period. The buying company is just being very kind.
and sir they classify it as equity settled share based. is it what they assume or there is something I am missing regarding some specific criteria that lead to equity settled share based.
Please guide if following narration look good.
“For the evaluation of share based payment as an additional consideration or remuneration we need to consider the fact whether employees are shareholders as well. From the scenario it is evident that key management personal is still in employment and it can be argued that key management personal are shareholders as well.
Key management personnel and employees are still in employment and as an expansion plan company want to keep them so they offer share based incentive. There is no other condition which can indicate it as an additional consideration so we classified it as share based payment as a part of remuneration.”
for my other question
sir I read that question again and got it.. its equity settled because it fall in its definition.A share?based payment transaction in which the entity
receives goods or services as consideration for its own equity instruments (including shares or share options), or
receives goods or services but has no obligation to settle the transaction with the supplier.
as entity already receive service from employees which indication from the fact that its is vesting immediately.
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