Specific situations
In this lesson, you'll learn how to account for hybrid share-based payment transactions where settlement can be made in either cash or equity. You'll discover how to classify these arrangements based on who holds the choice of settlement method, and how to split the accounting between equity and liability components.
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In this lesson
- 0:00 Hybrid share-based payments overview
- 0:40 Compound instruments with counterparty choice
- 1:38 Worked example: employee choice scheme
- 3:26 Recognising equity and liability components
- 6:09 Final year settlement and cumulative recognition
- 7:25 Group share-based payment transactions
About this lesson
This is essential for papers covering share-based payments, particularly SBR and AFM, as examiners frequently test your ability to handle these more complex scenarios. Through a worked example involving employee share options with a cash alternative, you'll see step-by-step how to measure and recognise both components separately over the vesting period, adjusting the liability for fair value changes at each year end while keeping the equity component fixed at grant date value.
Duration: 8m
Transcript
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