SBRShare based payments

You account for the liability or equity at the outset and adjust it year-on-year for any changes to the number of shares expected to vest. ie. If equity-settled share-based payment, you would dr p&l expense, credit share capital at the end of year 1. If cash-settled share-based payment, dr p&l expense, credit liability (note with cash-settled, you revise the fair value in each period) at the end of year 1.

Thanks this is very helpful. I understand everything apart from where the equity goes. I say this because I have done a mock exam and at the end of yr 1 the equity was put into OCI whereas you are saying it goes into share capital.

Yes, apologies. Credit Other equity reserves, not share capital.