Page 22 - Finac1 Test 2 slides - 4. Share-based Payment (IFRS 2)

SHARE-BASED PAYMENT

Vesting Conditions & FV

• IFRS 2 FV is not same as IFRS 13 FV (.6A)

• Factors that affect share option value
• General (non vesting)

• Current share price
• Exercise price
• Time value
• Expected volatility of share
• Expected dividends
• Vesting conditions
• Restricting on exercising

• IFRS 2 incorporates of the above factors that market participants would
include in valuation (.17, .21 & 21A)

• Except non marketing vesting conditions (.19)
• Account for these using best estimate of number expected to vest (.20)
• Service conditions – estimate how many employees will work for the required
period
• Non market performance conditions – estimate whether the performance target
will be met

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