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

Zenith Pharma Ltd grants share options to its employees. While preparing the notes, the finance team asks which standard governs the measurement of the fair value of those options. Under Ind AS 102, how is the fair value of the share-based payment measured?

Fair value of share-based payments is measured under Ind AS 102 itself. Paragraph 6A says the Standard uses fair value differently from Ind AS 113, so the entity applies the measurement requirements of Ind AS 102 and not Ind AS 113.

  1. AIn accordance with Ind AS 102 itself, because the Standard uses 'fair value' differently from Ind AS 113Correct
  2. BIn accordance with Ind AS 113, because it is the Standard that governs all fair value measurements
  3. CIn accordance with Ind AS 109, because options are financial instruments
  4. DIn accordance with Ind AS 8, because valuation is an accounting estimate

Explanation

Paragraph 6A states that Ind AS 102 uses 'fair value' in a way that differs in some respects from Ind AS 113. When applying Ind AS 102, an entity therefore measures fair value in accordance with Ind AS 102, not Ind AS 113. The Ind AS 113 option is the common mistake.

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