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Questions and Answers
What is a share-based payment?
What is a share-based payment?
A share-based payment occurs when an entity buys goods or services from other parties and settles the amounts payable by issuing its shares or share options, or incurs liabilities for cash payments based on its share price.
How is an expense recognized when a company pays for goods or services in cash?
How is an expense recognized when a company pays for goods or services in cash?
An expense is recognized in profit or loss.
What happens if a company 'pays' for goods or services in share options?
What happens if a company 'pays' for goods or services in share options?
No expense would be recognized.
Why is it considered inconsistent not to recognize a share-based payment transaction in the financial statements?
Why is it considered inconsistent not to recognize a share-based payment transaction in the financial statements?
What is the purpose of IFRS 2 Share-based Payment?
What is the purpose of IFRS 2 Share-based Payment?
What are the two types of share-based payments mentioned in the text?
What are the two types of share-based payments mentioned in the text?
What is a share option according to the text?
What is a share option according to the text?
How does a company acquire goods or services in equity-settled share-based payments?
How does a company acquire goods or services in equity-settled share-based payments?
What is the outcome of a cash-settled share-based payment transaction?
What is the outcome of a cash-settled share-based payment transaction?
Why did IFRS 2 Share-based Payment need to be issued?
Why did IFRS 2 Share-based Payment need to be issued?
What type of share-based payment transaction occurs when an entity acquires goods or services in exchange for amounts of cash measured by reference to the entity's share price?
What type of share-based payment transaction occurs when an entity acquires goods or services in exchange for amounts of cash measured by reference to the entity's share price?
Why is it considered inconsistent not to recognize a share-based payment transaction in the financial statements?
Why is it considered inconsistent not to recognize a share-based payment transaction in the financial statements?
What specific accounting standard was issued to address the anomaly of not recognizing share-based payment transactions?
What specific accounting standard was issued to address the anomaly of not recognizing share-based payment transactions?
In equity-settled share-based payments, what does the entity acquire goods or services in exchange for?
In equity-settled share-based payments, what does the entity acquire goods or services in exchange for?
What is the purpose of issuing share options in a share-based payment transaction?
What is the purpose of issuing share options in a share-based payment transaction?
Why do cash-settled share-based payments not result in an expense being recognized in profit or loss?
Why do cash-settled share-based payments not result in an expense being recognized in profit or loss?
When does IFRS 2 require share-based payment transactions to be recognized in the financial statements?
When does IFRS 2 require share-based payment transactions to be recognized in the financial statements?
What key service do employees provide in a share-based payment transaction?
What key service do employees provide in a share-based payment transaction?
Why is it important to recognize share-based payment transactions in the financial statements?
Why is it important to recognize share-based payment transactions in the financial statements?
How does an entity settle the amounts payable in an equity-settled share-based payment?
How does an entity settle the amounts payable in an equity-settled share-based payment?
