Page 26 - Finac1 Test 2 slides - 4. Share-based Payment (IFRS 2)

SHARE-BASED PAYMENT

Cash Settled SBP (.30 ‐ .33)

• Examples:

• Share appreciation rights (SARs)

• Phantom shares

• Payments based on value of company

• e.g. Agree to pay 3 times the amount by which the share price exceeds
R75 in 3 years time

• Accounting entry:

• Dr P/L;

• Cr Liability

• Liability adjusted each reporting date to best estimate of

amount expected to be paid

• Take into account

• Terms and conditions of agreement
• Extent to which employees have rendered services

26