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

Veda Pharma Ltd grants its employees share options. The finance head proposes measuring the fair value of these options using the definition of fair value given in Ind AS 113 Fair Value Measurement, on the ground that it is the general fair value standard. Which statement is correct as per Ind AS 102?

Fair value for share-based payment is measured under Ind AS 102 itself, not Ind AS 113. Ind AS 102 uses the term fair value differently in some respects from Ind AS 113, so the Ind AS 113 definition cannot be applied to the options.

  1. AInd AS 113 must be applied, because it is the standard that defines fair value for all Ind AS
  2. BFair value is measured in accordance with Ind AS 102, not Ind AS 113, because Ind AS 102 uses the term differently in some respectsCorrect
  3. CEither Ind AS 113 or Ind AS 102 may be used, at the entity's choice for each grant
  4. DInd AS 113 applies to equity-settled grants and Ind AS 102 applies only to cash-settled grants

Explanation

Paragraph 6A of Ind AS 102 says the Standard uses 'fair value' in a way that differs in some respects from Ind AS 113. Hence an entity measures fair value as per Ind AS 102, not Ind AS 113. The option allowing Ind AS 113 is wrong because the Standard expressly excludes it.

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