CAPM Efficient Frontier Curve for PowerPoint

IFRS 2 Share-based Payment.

Agenda. 01. Definition. Objective. 03. Exclusion.

Learning Objectives. Companyname.com. 3. Differentiate between equity settled and cash settled share based payments.

01. DEFINITION.

Definition - Share-based Payments - IFRS 2. A share-based payment is a transaction in which the entity receives goods or services either as consideration for its equity instruments or by incurring liabilities for amounts based on the price of the entity's shares or other equity instruments of the entity. The share-based payment’s requirements in accounting depends on how the transaction will be settled , that is, by the issuance of equity , cash , or equity or cash ..

02. OBJECTIVE.

Objective. Companyname.com. 7. The objective of IFRS 2 share based payment is to specify the financial reporting by an entity when it undertakes a share-based payment transactions..

What is share-based Payment Transaction. Share-based payment transaction is a transaction where: The entity receives goods or services from the supplier (including employee) in a share-based payment arrangement; or Incurs and obligation to settle the transaction with the supplier in a share-based payment arrangement when another group entity receives these goods or services..

What is share-based Payment Transaction.

Share-based Arrangement. Share base payment arrangement is an agreement between the entity and another party (including an employee) whereby the other party receives..

Share-based Arrangement. Cash or other assets of the entity for amount that are based on the price (or value) of equity instrument including shares or share options) of the entity or another group entity. This type of arrangement is Cash-settled share-based payment transaction. Equity instruments (including shares or share option) of the entity or another group entity. This type is called equity-settled share-based payment..

Share-based Arrangement.

03. EXCLUSION.

Exclusion. IFRS 2 not applicable to:. Certain contract transactions falling within IAS 32 or IAS 39. Share issued as consideration in a business combination (IFRS 3)..

Grant Date. Companyname.com. 15. Grant date is the date when the entity and counterparty agree to the share-based payment and the entity confers on the counterparty the right to the equity instruments of the entity, cash or other asset provided the vesting conditions are met..

Vesting Period. Companyname.com. 16. Vesting period is the period during which the specified vesting conditions are satisfied. It can be a specific time such as when the employee has fulfilled the terms stipulated, such as period of service or performance level..

Vesting Condition. Some share-based payment transactions include vesting conditions that must be met before any payment is made. IFRS 2 recognizes two types of vesting condition: Service Conditions : It requires the counterparty to complete a specified period or services. Performance Conditions : It requires the counterparty to complete a specified period of services and specified performance target to be met. A performance condition might include a market condition that is linked to the market price of shares in some way..

Companyname.com. 18. Share dividend. Purchase of treasury shares.

04. CLASSIFIATION.

Classification. Equity‑settled share‑based payment transactions Cash‑settled share‑based payment transactions Choice of settlement.

Classification. 1. Equity-settled Share-based Payment Transactions.

Classification. 2. Cash-settled Share-based Payment Transaction.

Classification. 3. Transactions with a choice of settlement.

05. ACCOUNTING AND RECOGNITION.

Accounting And Recognition. The basic recognition criteria is to recognize goods or services received in as shared based payment transaction when the goods are obtained or services are received. Goods or services acquired should be recognized as expense in profit or loss unless they qualify for recognition of assets..

Accounting And Recognition. 2. The credit side depend on the type of share-based payment arrangement: If goods or services were acquired in an equity-settled share-based payment transaction, then the corresponding increase is recognized in equity. If goods or services were acquired in a cash-settled share-based payment transaction, then the corresponding increase is recognized as a liability..

06. MEASURMENT.

Companyname.com. 28. Indirect Method (Employees).

Amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm’s length transaction..

07. MODIFICATIONS.

Modification. If IFRS2 clarifies that the guidance on modifications also applies to instruments modified after their vesting date. If FV of New Instrument > Old Instruments, incremental cost is recognized based on vesting period in the similar manner to the original amount. If the fair value of the new instruments < FV of the old instruments, the original fair value of the equity instruments granted should be expensed as if the modification never occurred. If the modification happens after the vesting period, the expenses are relegalized immediately..

07. CALCELATION OR SETTLEMENT.

Cancellation Or Settlement. Cancellation or settlement leads to acceleration of vesting period, therefor, any unrecognized amounts should be recognized immediately. Any payments made with the cancellation or settlement (up to the fair value of the equity instruments) should be accounted for as the repurchase of an equity interest. Any payment in excess of the fair value of the equity instruments granted is recognized as an expense..

08. DISCLOSURE.

Disclosure. To understand the nature and extent of the share-based payment that existed during the period. To understand the FV of the goods/services received against the equity instruments granted to the vendor. To understand effect of expenses from share-based transaction on the Income Statement..

Thank you. This is a sample text. Insert your desired text here..