Page 21 - Finac1 Test 2 slides - 4. Share-based Payment (IFRS 2)

SHARE-BASED PAYMENT

Vesting Conditions & FV

• Vesting conditions - same as restrictions

• Service conditions

• Period required to work
• Market performance conditions

• Related to share price

• E.g target share price
• Non-market performance conditions
• Other conditions – not related to share price

• E.g target earnings

• Do these vesting conditions affect value of equity
instrument?

• Eg An option is granted with an exercise price of R2 that can be

exercise in 3 years time
• The option may only be exercised if the company’s profits are R4
billion

21