Question 1

AASB 2 requires some share-based payments to be recognised in an entity's financial statements.

Accepted Answer

A) True 
 B)False

Question 2

AASB 2 requires the re-measurement of cash-settled transactions at fair value at reporting date.

Accepted Answer

A) True 
 B)False

Question 3

What is the journal entry to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2011?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 4

What would be the appropriate journal entry to account for the share-based payment transaction for the year ending 30 June 2012?

Accepted Answer

A)    
B)    
C)    
D)    
E)  None of the given answers. 
A)    
B)    
C)    
D)    
E)  None of the given answers.

Question 5

What is the Employee benefits expense of Liverpool Ltd related to this share option for the year ended 30 June 2011?

Accepted Answer

A)  $19,500 
B)  $24,200 
C)  $43,700 
D)  $57,000 
E)  None of the given answers 
A)  $19,500 
B)  $24,200 
C)  $43,700 
D)  $57,000 
E)  None of the given answers

Question 6

Which of the following items are considered share-based payment transactions within the scope of AASB 2?

Accepted Answer

A)  An entity grants 200 share options to all employees. 
B)  An entity grants 200 share options to all employees but requires employees to work at least 3 years. 
C)  An entity acquires a piece of equipment from another entity in exchange for shares of the entity. 
D)  An entity issues share appreciation rights to its employees. 
E)  All of the given answers. 
A)  An entity grants 200 share options to all employees. 
B)  An entity grants 200 share options to all employees but requires employees to work at least 3 years. 
C)  An entity acquires a piece of equipment from another entity in exchange for shares of the entity. 
D)  An entity issues share appreciation rights to its employees. 
E)  All of the given answers.

Question 7

AASB 2 does not require expensing of cash-settled share- based payment transactions until settlement date.

Accepted Answer

A) True 
 B)False

Question 8

If an entity alters the conditions of the options after issue,AASB 2 requires the effects of such modifications to be recognised.

Accepted Answer

A) True 
 B)False

Question 9

AASB 2 requires all equity-settled share-based payment transactions be measured at fair value of goods and services received.

Accepted Answer

A) True 
 B)False

Question 10

On 30 June 2010,based on probability estimates how many employees are expected to be employed by Windermere Ltd when the share vests?

Accepted Answer

A)  75 
B)  78 
C)  85 
D)  88 
E)  90 
A)  75 
B)  78 
C)  85 
D)  88 
E)  90

Question 11

On 1 July 2009,Manchester Ltd granted 50,000 share options to its Chief Executive Officer with an exercise price of $40 per share,conditional upon the entity achieving the following non-market vesting conditions:   Earnings information available follows:
  In accordance with AASB 2,when will this share option vest?

Accepted Answer

A)  1 July 2009 
B)  30 June 2010 
C)  30 June 2011 
D)  30 June 2012 
E)  None of the given answers 
A)  1 July 2009 
B)  30 June 2010 
C)  30 June 2011 
D)  30 June 2012 
E)  None of the given answers

Question 12

What is the journal entry to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2014?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 13

A share-based payment is a transaction which entitles another party to receive a cash payment with the amount paid dependent on the price of the entity's shares or other equity instruments.

Accepted Answer

A) True 
 B)False

Question 14

What action must Wigan Ltd take that is in compliance with AASB 2,if the option does not vest on 30 June 2012?

Accepted Answer

A)  No action necessary. 
B)  It must modify the terms and conditions of the option to allow the employees to benefit from the share-based payment transaction in future. 
C)  The equity account arising from the share-based payment transaction shall be reversed and credited to revenue. 
D)  The equity account arising from the share-based payment transaction shall be reversed and credited to liability. 
E)  None of the given answers. 
A)  No action necessary. 
B)  It must modify the terms and conditions of the option to allow the employees to benefit from the share-based payment transaction in future. 
C)  The equity account arising from the share-based payment transaction shall be reversed and credited to revenue. 
D)  The equity account arising from the share-based payment transaction shall be reversed and credited to liability. 
E)  None of the given answers.

Question 15

Penneshaw Ltd grants 100 options to each of its 50 employees on 1 July 2009.Each grant is conditional on the employee working for the company for 3 years.The fair value of each option at grant date is $15. The following information is available:
  What is the employee benefits expense of Penneshaw Ltd related to this share option for the year ended 30 June 2012?

Accepted Answer

A)  $16 000; 
B)  $20 000; 
C)  $21 333; 
D)  $26 400; 
E)  None of the given answers 
A)  $16 000; 
B)  $20 000; 
C)  $21 333; 
D)  $26 400; 
E)  None of the given answers

Question 16

In a cash-settled share-based payment transaction,the entity shall remeasure the fair value of the liability at each reporting date and at the date of settlement,with any changes in fair value recognised in profit or loss for the period.

Accepted Answer

A) True 
 B)False

Question 17

What would be the appropriate journal entry to account for the share-based payment transaction for the year ending 30 June 2011?

Accepted Answer

A)    
B)    
C)    
D)    
E)  None of the given answers. 
A)    
B)    
C)    
D)    
E)  None of the given answers.

Question 18

What is/are the journal entry/ies to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2012?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 19

On 30 June 2012,based on probability estimates how many employees are expected to be employed by Windermere Ltd when the share vests?

Accepted Answer

A)  78 
B)  82 
C)  88 
D)  90 
E)  None of the given answers 
A)  78 
B)  82 
C)  88 
D)  90 
E)  None of the given answers

Question 20

In share-based payment transactions with cash alternatives,the entity shall measure the equity component of the compound financial instrument as the difference between the fair value of the goods or services received and the fair value of the debt component,measured at vesting date.

Accepted Answer

A) True 
 B)False

Exam 18: Accounting for Share-Based Payments

AASB 2 requires some share-based payments to be recognised in an entity's financial statements.

AASB 2 requires the re-measurement of cash-settled transactions at fair value at reporting date.

What is the journal entry to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2011?

What would be the appropriate journal entry to account for the share-based payment transaction for the year ending 30 June 2012?

What is the Employee benefits expense of Liverpool Ltd related to this share option for the year ended 30 June 2011?

Which of the following items are considered share-based payment transactions within the scope of AASB 2?

AASB 2 does not require expensing of cash-settled share- based payment transactions until settlement date.

If an entity alters the conditions of the options after issue,AASB 2 requires the effects of such modifications to be recognised.

AASB 2 requires all equity-settled share-based payment transactions be measured at fair value of goods and services received.

On 30 June 2010,based on probability estimates how many employees are expected to be employed by Windermere Ltd when the share vests?

What is the journal entry to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2014?

A share-based payment is a transaction which entitles another party to receive a cash payment with the amount paid dependent on the price of the entity's shares or other equity instruments.

What action must Wigan Ltd take that is in compliance with AASB 2,if the option does not vest on 30 June 2012?

In a cash-settled share-based payment transaction,the entity shall remeasure the fair value of the liability at each reporting date and at the date of settlement,with any changes in fair value recognised in profit or loss for the period.

What would be the appropriate journal entry to account for the share-based payment transaction for the year ending 30 June 2011?

What is/are the journal entry/ies to recognise salary expense for Southport Ltd.related to the share appreciation rights issued 1 July 2009 for the year ended 30 June 2012?

On 30 June 2012,based on probability estimates how many employees are expected to be employed by Windermere Ltd when the share vests?

In share-based payment transactions with cash alternatives,the entity shall measure the equity component of the compound financial instrument as the difference between the fair value of the goods or services received and the fair value of the debt component,measured at vesting date.

An Overview of the Australian External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financ

Theories of Financial Accounting

An Overview of Accounting for Assets

Depreciation of Property, plant and Equipment

Revaluation and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

Accounting for Heritage Assets and Biological Assets

An Overview of Accounting for Liabilities

Accounting for Lease

Set-Off and Extinguishment of Debt

Accounting for Employee Benefits

Share Capital and Reserves

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in E

Accounting for Income Taxes

Cash-Flow Statements

Accounting for the Extractive Industries

Accounting for General Insurance Contracts

Accounting for Superannuation Plans

Events Occurring After Balance Sheet Date

Segment Reporting

Related-Party Disclosures

Earnings Per Share

Accounting for Group Structures

Further Consolidation Issues I: Accounting for Intragroup Transact

Further Consolidation Issues II: Accounting for Minority Interests

Further Consolidation Issues III: Accounting for Indirect Ownershi

Further Consolidation Issues Iv: Accounting for Changes in the Deg

Accounting for Equity Investments

Accounting for Equity Investments

Accounting for Foreign Currency Transactions

Translation of the Accounts of Foreign Operations

Accounting for Corporate Social Responsibility

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