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PENSION SCHEME AND SHARE BASED PAYMENT

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › PENSION SCHEME AND SHARE BASED PAYMENT

  • This topic has 3 replies, 2 voices, and was last updated 3 days ago by Stephen Widberg.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
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  • June 4, 2022 at 11:14 pm #657388
    syedmushahid
    • Topics: 18
    • Replies: 35
    • ☆☆

    Hi Stephen
    Can you suggest what items should be recognised in cash flow statement if questions comes related to pension (benefit and contribution) and share based payment ( option and SARS)
    Kind regards
    Syed

    June 5, 2022 at 3:19 pm #657445
    Stephen Widberg
    Moderator
    • Topics: 10
    • Replies: 2517
    • ☆☆☆☆☆

    Pension:

    1. Operating cash flows – ADD BACK WHATEVER HAS BEEN CHARGED IN THE P&L (non-cash item)
    2. Operating cash flows – DEDUCT CONTRIBUTIONS PAID

    SBP

    Equity settled – add back SBP expense
    Cash settled – add back SBP expense

    If options / SARs are exercised there will be additional cash flows – I would just do what it says in the question.

    June 5, 2022 at 9:14 pm #657478
    syedmushahid
    • Topics: 18
    • Replies: 35
    • ☆☆

    Thanks Stephen for the reply

    Just to clear myself what I understand from your answer is

    Cash flow from pension scheme

    Present and past service charges and finance cost needs to be added back. Contribution paid needs to be minus from operating cash flow

    Cash flow from share based payment

    Expenses related to them needs to be added back to operating cash flow

    Correct me if I am wrong
    Also can you please explain what will be the impact on cash flow if option and SARS are exercised

    Kind regards

    June 22, 2022 at 10:13 am #659107
    Stephen Widberg
    Moderator
    • Topics: 10
    • Replies: 2517
    • ☆☆☆☆☆

    Exercise of SARs / option

    SARs – company pays out cash – operating outflow

    Option – Company receives cash when employee pays exercise price – financing inflow

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