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

On 1 April 2025, Kaveri Pharma Ltd granted 50 share options to each of 200 employees, vesting after 3 years of service. The grant-date fair value of each option is Rs 40. At the end of year 1, the company expected 20 employees in total to leave before vesting. At the end of year 2, it expected 35 in total to leave. No one has left by the end of year 2 other than as expected. What is the expense recognised in year 2?

The year 2 expense is Rs 1,00,000. The cumulative charge at the end of year 2 is 165 employees x 50 options x Rs 40 x 2/3, which is Rs 2,20,000. Deducting the Rs 1,20,000 already recognised in year 1 leaves Rs 1,00,000.

  1. ARs 1,00,000Correct
  2. BRs 1,10,000
  3. CRs 1,20,000
  4. DRs 2,20,000

Explanation

Year 1 cumulative: 180 x 50 x Rs 40 x 1/3 = Rs 1,20,000. Year 2 cumulative: 165 x 50 x Rs 40 x 2/3 = Rs 2,20,000. Year 2 expense = 2,20,000 - 1,20,000 = Rs 1,00,000. Rs 2,20,000 is the cumulative figure, and Rs 1,10,000 ignores the catch-up for the year 1 charge.

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