Sample interview questions: How do you assess the accounting for share-based payment arrangements (IFRS 2)?
Sample answer:
Assessment of Accounting for Share-Based Payment Arrangements (IFRS 2)
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Identify and Verify Eligible Transactions:
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Determine whether the arrangements meet the definition of share-based payment arrangements (e.g., share options, restricted shares).
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Review supporting documentation to confirm the terms and conditions of the arrangements.
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Measure the Fair Value:
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Use a recognized valuation method (e.g., Black-Scholes, binomial lattice) to estimate the fair value of the instruments at the grant date.
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Consider market and company-specific factors, such as share price, volatility, and expected life of the instruments.
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Recognize the Expense:
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Recognize an expense over the vesting period of the instruments.
- Allocate the expense on a systematic basis to the periods in which services are provided.
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Adjust the expense for changes in the fair value of the instruments (if required).
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Classify the Expense:
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Classify the expense as employee compensation in the income statement.
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