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

Sundaram Textiles Ltd grants share options to its employees. While preparing its financial statements, the finance head proposes to measure the fair value of the equity instruments granted by applying the fair value definition and measurement guidance of Ind AS 113 Fair Value Measurement. Which statement is correct under Ind AS 102?

Fair value for share-based payment is measured in accordance with Ind AS 102 itself and 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.

  1. AFair value must be measured under Ind AS 113 because it is the general fair value standard
  2. BFair value is measured in accordance with Ind AS 102 itself, not Ind AS 113, as the term is used differently in some respectsCorrect
  3. CFair value may be measured under either Ind AS 102 or Ind AS 113 at the entity's choice
  4. DFair value is measured under Ind AS 113 for equity-settled and under Ind AS 102 for cash-settled transactions

Explanation

Ind AS 102 uses the term fair value in a way that differs in some respects from Ind AS 113. Therefore, when applying Ind AS 102, the entity measures fair value as per Ind AS 102, not Ind AS 113. The proposal to use Ind AS 113 is wrong, and there is no free choice or split by settlement type.

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