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CA Final · Financial Reporting · Ind AS 102 Share Based Payment

Ananya Textiles Ltd grants share options to its employees. The CFO suggests that, because Ind AS 102 requires the fair value of the options to be measured, the company should apply the fair value measurement requirements of Ind AS 113 to determine the grant-date value. Which statement is correct as per the text of Ind AS 102?

Fair value for share-based payments is measured in accordance with Ind AS 102 itself, not Ind AS 113, because Ind AS 102 uses the term fair value in a way that differs in some respects from the definition in Ind AS 113, as stated in paragraph 6A.

  1. AInd AS 113 applies, because it is the single standard for all fair value measurements in Ind AS
  2. BFair value is measured in accordance with Ind AS 102 itself, as its use of the term differs in some respects from Ind AS 113Correct
  3. CFair value is measured under Ind AS 113 for equity-settled awards and under Ind AS 102 for cash-settled awards
  4. DFair value is the intrinsic value of the option, so neither standard's measurement requirements apply

Explanation

Paragraph 6A states that Ind AS 102 uses the term fair value in a way that differs in some respects from Ind AS 113. So an entity measures fair value in accordance with Ind AS 102, not Ind AS 113. The option applying Ind AS 113 is wrong because it ignores this scope carve-out.

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