Question

In the case of a Cash-settled share-based payment where the employee’s services vest over a three-year period, how must the entity recognize and measure the transaction as per Ind AS 102?

Q: Answer-In the case of a Cash-settled share-based payment where the employee&rsquo;s services vest...

Unlike equity-settled payments where FV is fixed at grant, Cash-settled payments require the entity to recognize a liability. This liability must be re-measured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in the Profit or Loss for the period. The expense is spread over the vesting period to reflect the services rendered.

A The entire fair value of the liability is recognized as an expense on the Grant Date.

B The liability is recognized over the vesting period and re-measured at fair value at each reporting date until settled.

C The expense is recognized equally over three years based on the Grant Date fair value only.

D No expense is recognized until the cash is actually paid out to the employee (Cash basis).

E The transaction is treated as an equity-settled payment until the final exercise date.

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In the case of a Cash-settled share-based payment where the employee’s services vest over a three-year period, how must the entity recognize and measure the transaction as per Ind AS 102?

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