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

Kaveri Textiles Ltd, an Indian company, is preparing its financial statements under Ind AS. Its CFO says that because Ind AS 102 deals with fair value, the fair value of the share options granted to employees must be determined strictly under Ind AS 113 Fair Value Measurement. Which statement is correct as per para 6A of Ind AS 102?

Fair value must be measured under Ind AS 102 itself, not Ind AS 113. Para 6A explains that Ind AS 102 uses the term fair value differently from Ind AS 113 in some respects, so the CFO's insistence on Ind AS 113 is incorrect.

  1. AInd AS 113 must be applied, because it is the only Ind AS that defines fair value
  2. BInd AS 102 uses 'fair value' in a way that differs in some respects from Ind AS 113, so fair value is measured in accordance with Ind AS 102Correct
  3. CInd AS 113 applies to equity-settled awards only and Ind AS 102 applies to cash-settled awards only
  4. DEither Ind AS 102 or Ind AS 113 may be chosen as a policy for each award

Explanation

Para 6A states that the term fair value in Ind AS 102 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 CFO's view therefore contradicts the standard. No policy choice or split by settlement type is provided.

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