Question 1

In situations where an option-pricing model is required to be used to determine the fair value of equity instruments granted IFRS 2 Share-based Payment:

Accepted Answer

A)  requires expected dividends to be taken into account when measuring the shares or options granted. 
B)  allows the entity to choose the option-pricing model it wishes to use, but contains a number of factors that the option-pricing model selected must take into account as a minimum. 
C)  requires the use of a binominal option-pricing model. 
D)  requires the use of the Black-Scholes-Merton formula. 
A)  requires expected dividends to be taken into account when measuring the shares or options granted. 
B)  allows the entity to choose the option-pricing model it wishes to use, but contains a number of factors that the option-pricing model selected must take into account as a minimum. 
C)  requires the use of a binominal option-pricing model. 
D)  requires the use of the Black-Scholes-Merton formula.

Question 2

A share-based payment transaction in which the entity receives goods or services as consideration for equity instruments of the entity is classified in IFRS 2 Share-based Payment as

Accepted Answer

A)  an equity-settled share-based payment transaction 
B)  a cash-settled share-based payment transaction 
C)  a liability-settled share-based payment transaction 
D)  an "other" share-based payment transaction 
A)  an equity-settled share-based payment transaction 
B)  a cash-settled share-based payment transaction 
C)  a liability-settled share-based payment transaction 
D)  an "other" share-based payment transaction

Question 3

On 1 July 2015 Pepper Limited granted 500 share options to each of its 100 employees. Each grant is conditional on the employee working for the company for the next two years. The fair value of each option is estimated to be €3.00. Pepper estimates that 8% of its employees will leave during the two year period and therefore forfeit their rights to the share options. During the year ended 30 June 2016 five employees left. At this time the company revised its estimate of total employee departures over the full two-year period to 10%.
During the year ended 30 June 2017 a further 4 employees left.
The amount to be recognised as an expense by Pepper for the year ended 30 June 2016 is:

Accepted Answer

A)  €67 500 
B)  €69 000 
C)  €71 250 
D)  €135 000 
A)  €67 500 
B)  €69 000 
C)  €71 250 
D)  €135 000

Question 4

Which of the following statements in relation to disclosures required under IFRS 2 is not correct?

Accepted Answer

A)  Option pricing models used in valuing share options must be identified. 
B)  The number and weighted average exercise price of share options outstanding at the beginning and end of each period must be disclosed. 
C)  Information about share-based payment arrangements that are substantially the same may be aggregated. 
D)  The total expense arising from share-based payment transactions in which the services qualified for recognition as an asset must be disclosed. 
A)  Option pricing models used in valuing share options must be identified. 
B)  The number and weighted average exercise price of share options outstanding at the beginning and end of each period must be disclosed. 
C)  Information about share-based payment arrangements that are substantially the same may be aggregated. 
D)  The total expense arising from share-based payment transactions in which the services qualified for recognition as an asset must be disclosed.

Question 5

Reload features are accounted for as follows:

Accepted Answer

A)  included in the fair value of the initial options granted at measurement date 
B)  separately from the initial options granted 
C)  as a market condition 
D)  as a modification to the initial terms and conditions of the initial options granted 
A)  included in the fair value of the initial options granted at measurement date 
B)  separately from the initial options granted 
C)  as a market condition 
D)  as a modification to the initial terms and conditions of the initial options granted

Question 6

Which of the following is NOT within the scope of IFRS 2?

Accepted Answer

A)  Transactions in which the entity receives or acquires goods or services as part of the net assets acquired in a business combination to which IFRS 3 Business Combinations applies. 
B)  Equity instruments granted to employees of the acquiree in a business combination in their capacity as an employee. 
C)  Cancellation, replacement or other modification of share-based payment arrangements because of a business combination. 
D)  Cancellation, replacement or other modification of share-based payment arrangements because of other equity restructuring. 
A)  Transactions in which the entity receives or acquires goods or services as part of the net assets acquired in a business combination to which IFRS 3 Business Combinations applies. 
B)  Equity instruments granted to employees of the acquiree in a business combination in their capacity as an employee. 
C)  Cancellation, replacement or other modification of share-based payment arrangements because of a business combination. 
D)  Cancellation, replacement or other modification of share-based payment arrangements because of other equity restructuring.

Question 7

The following information relates to questions 
Viola Ltd has granted each of its 10 senior executives a choice between receiving a cash payment equivalent to 1000 shares or receiving 1200 share.  The grant is conditional on the completion of three years’ service with the company.  If the share alternative is chosen, the shares must be held for two years after vesting date.  At grant date the company’s share price is £25 per share.  At the end of years 1, 2 and 3 the share price is £27, £28 and £30 respectively.  The company does not expect to pay dividends in the next three years.  After taking into account the effect of post-vesting transfer restrictions the company estimates the grant-date fair value of the share alternative is £24 per share.
-What is the liability component at the end of year 1?

Accepted Answer

A)  £83 333 
B)  £90 000 
C)  £100 000 
D)  £108 000 
A)  £83 333 
B)  £90 000 
C)  £100 000 
D)  £108 000

Question 8

The following information relates to questions 
Viola Ltd has granted each of its 10 senior executives a choice between receiving a cash payment equivalent to 1000 shares or receiving 1200 share.  The grant is conditional on the completion of three years’ service with the company.  If the share alternative is chosen, the shares must be held for two years after vesting date.  At grant date the company’s share price is £25 per share.  At the end of years 1, 2 and 3 the share price is £27, £28 and £30 respectively.  The company does not expect to pay dividends in the next three years.  After taking into account the effect of post-vesting transfer restrictions the company estimates the grant-date fair value of the share alternative is £24 per share.
-What is the fair value of the equity alternative?

Accepted Answer

A)  £240 000 
B)  £250 000 
C)  £288 000 
D)  £300 000 
A)  £240 000 
B)  £250 000 
C)  £288 000 
D)  £300 000

Question 9

The following information relates to questions 
On 1 July 2013 Fantasy Ltd granted 200 options to each of its 100 employees. The share options will vest on 30 June 2015 if the employees remain employed with the company on that date. The share options have a life of four years. The exercise price is $5, which is also Fantasy's share price at the grant date. Fantasy is unable to reliably estimate the fair value of the share options at the grant date.
Fantasy's share price and the number of options exercised are set out below. Share options may only be exercised at year end.
 $$\begin{array} { | l | l | l | } 
\hline \text { Year ended } & \begin{array} { l } 
\text { Share price } \
\text { at year end }
\end{array} & \begin{array} { l } 
\text { Number of aptions } \
\text { exercised at year end }
\end{array} \
\hline \text { 30 June } 2014 & \$ 6 & - \
\hline \text { 30 June } 2015 & \$ 7 & - \
\hline \text { 30 June } 2016 & \$ 8 & 7,800 \
\hline \text { 30 June } 2017 & \$ 9 & 10,000\
\hline
\end{array}$$
-The formula to calculate the remuneration expense for the year ended 30 June 2016 is:

Accepted Answer

A)  7800 x ($8-$7) 
B)  7800 x $8 
C)  (7800 + 10 000) x ($8-$5) 
D)  (7800 + 10 000) x ($8-$7) 
A)  7800 x ($8-$7) 
B)  7800 x $8 
C)  (7800 + 10 000) x ($8-$5) 
D)  (7800 + 10 000) x ($8-$7)

In situations where an option-pricing model is required to be used to determine the fair value of equity instruments granted IFRS 2 Share-based Payment:

A share-based payment transaction in which the entity receives goods or services as consideration for equity instruments of the entity is classified in IFRS 2 Share-based Payment as

Which of the following statements in relation to disclosures required under IFRS 2 is not correct?

Reload features are accounted for as follows:

Which of the following is NOT within the scope of IFRS 2?

The Iasb and Its Conceptual Framework

Owners Equity: Share Capital and Reserves

Fair Value Measurement

Revenue From Contracts With Customers

Provisions, Contingent Liabilities and Contingent Assets

Financial Instruments

Inventories

Employee Benefits

Leases

Impairment of Assets

Financial Statement Presentation

Statement of Cash Flows

Operating Segments

Other Key Notes Disclosures

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Translation of the Financial Statements of Foreign Entities

Agriculture

Associates and Joint Ventures

Joint Arrangements

Revenue From Contracts With Customers

Financial Instruments

Financial Instruments

Share-Based Payment

Exploration for and Evaluation of Mineral Resources

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Exam 7: Share-Based Payment

In situations where an option-pricing model is required to be used to determine the fair value of equity instruments granted IFRS 2 Share-based Payment:

A share-based payment transaction in which the entity receives goods or services as consideration for equity instruments of the entity is classified in IFRS 2 Share-based Payment as

Which of the following statements in relation to disclosures required under IFRS 2 is not correct?

Reload features are accounted for as follows:

Which of the following is NOT within the scope of IFRS 2?

The Iasb and Its Conceptual Framework

Owners Equity: Share Capital and Reserves

Fair Value Measurement

Revenue From Contracts With Customers

Provisions, Contingent Liabilities and Contingent Assets

Financial Instruments

Inventories

Employee Benefits

Leases

Impairment of Assets

Financial Statement Presentation

Statement of Cash Flows

Operating Segments

Other Key Notes Disclosures

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Translation of the Financial Statements of Foreign Entities

Agriculture

Associates and Joint Ventures

Joint Arrangements

Revenue From Contracts With Customers

Financial Instruments

Financial Instruments

Share-Based Payment

Exploration for and Evaluation of Mineral Resources

Filters