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CMA Final · Corporate Financial Reporting · Share based Payment (Ind AS 102)

On 1 April 2025, Ganga Retail Ltd granted 200 share appreciation rights (settled in cash) to each of 100 managers, vesting after 3 years of service. Fair value of one right: Rs 30 at 31 March 2026 and Rs 36 at 31 March 2027, with grant-date fair value also Rs 30. At 31 March 2026, 90 managers were expected to vest; at 31 March 2027, 88 were expected. What expense is recognised for the year ended 31 March 2027?

The expense is Rs 2,42,400. For cash-settled rights the liability is remeasured at current fair value each year. It is Rs 4,22,400 at 31 March 2027 (88 x 200 x Rs 36 x 2/3) against Rs 1,80,000 a year earlier, so the year's charge is the difference.

  1. ARs 1,72,000
  2. BRs 2,42,400Correct
  3. CRs 2,52,000
  4. DRs 4,22,400

Explanation

Cash-settled awards are remeasured to fair value at each reporting date. Liability at 31 March 2026 = 90 x 200 x Rs 30 x 1/3 = Rs 1,80,000. Liability at 31 March 2027 = 88 x 200 x Rs 36 x 2/3 = Rs 4,22,400. Year 2 expense = Rs 2,42,400. Using grant-date fair value gives Rs 1,72,000, and using 90 managers gives Rs 2,52,000.

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