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When a share based payment transaction is for services (other than employment ) they should be recognised when rendered. Right?2.a) services are normally for a period of time for example 6 month haircut service. In such cases when we will recognize ?
B) do we debit prepaid expense at start of service and credit equity.and over time convert prepaid expense to expense?Hi,
We recognise the transaction as the service is performed, so in your hair cut example (an awful long time for a hair cut?!?!?) you would recognise it over six months.
There would be no prepaid expense as we haven’t prepaid anything in the transaction. We just recognise the entries in the same fashion as we would with the services provided by an employee.
Thanks
We gave x number of shares for (six month hair cut service contract) .
a) So i believe we pre-paid for 6 months upcoming. and b) as shares are given at day 1 ,we should credit equity in full. No?
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