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

Sundaram Textiles Ltd grants its employees share options. The finance head proposes to measure the fair value of these options using the definition of fair value in Ind AS 113, Fair Value Measurement, because the entity applies Ind AS 113 for its investment property. Which statement is correct as per Ind AS 102?

The entity should measure fair value under Ind AS 102 itself, not Ind AS 113. Ind AS 102 uses the term fair value in a way that differs in some respects from the Ind AS 113 definition, so the Ind AS 113 definition cannot be applied to share option grants.

  1. AInd AS 102 uses 'fair value' differently in some respects from Ind AS 113, so the entity measures fair value in accordance with Ind AS 102, not Ind AS 113Correct
  2. BThe entity must always apply the Ind AS 113 definition because it is the master standard on fair value
  3. CThe entity may choose either Ind AS 102 or Ind AS 113 for each grant as an accounting policy
  4. DInd AS 113 applies to equity-settled grants while Ind AS 102 applies only to cash-settled grants

Explanation

Paragraph 6A of Ind AS 102 states that the standard uses the term fair value in a way that differs in some respects from Ind AS 113. Therefore, when applying Ind AS 102, an entity measures fair value in accordance with Ind AS 102 and not Ind AS 113. The other options wrongly give Ind AS 113 precedence or a free choice.

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