Question 1

Which of the following is within the scope of IFRS 2 Share-based Payment.

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)  Transaction in which the entity receives or acquired goods or services under a contract which is within the scope of IFRS 139 Financial Instruments: Recognition & Measurement. 
C)  Transactions with employees in the employee's capacity as a holder of equity instruments of the entity. 
D)  Cancellation, replacement or modification of share-based payments arising because of a business combination or 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)  Transaction in which the entity receives or acquired goods or services under a contract which is within the scope of IFRS 139 Financial Instruments: Recognition & Measurement. 
C)  Transactions with employees in the employee's capacity as a holder of equity instruments of the entity. 
D)  Cancellation, replacement or modification of share-based payments arising because of a business combination or restructuring.

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

THE FOLLOWING INFORMATION RELATES TO QUESTIONS 12 - 14
On 1 July 2013 Watson Pty Ltd granted 100 share appreciation rights (SARS) to each of its 50 employees, conditional on the employee not leaving the company in the next three years. The company estimates the fair value of the SARS at the end of each year in which a liability exists as shown in the table below. The intrinsic values of the SARS at the date of exercise at 30 June 2016, 2017 and 2018 are also shown. All SARS held by employees at 30 June 2016 vest.
   
By 30 June 2016 nine employees have left and 15 employees have exercised their SARS.
-The amount recognised as an expense for the year ended 30 June 2016 is:

Accepted Answer

A)  $5987 
B)  $22 500 
C)  $28 487 
D)  $47 320 
A)  $5987 
B)  $22 500 
C)  $28 487 
D)  $47 320

Question 4

On 1 July 2013, Leo Limited granted 250 options to each of its 50 employees. The options are conditional on the employees remaining with the company for the 2 year vesting period. The options have a fair value of $10 at vesting date. In addition, the shares will vest as follows:
On 30 June 2014 if the company's earnings have increased by more than 15%
On 30 June 2015 if the company's earnings have increased by more than 12% averaged across the 2 year period
At 30 June 2014 Leo's earnings have increased by 12% and 3 employees have left.
The company expects that earnings will continue to increase at a similar rate during the year to 30 June 2015 and that the shares will vest at that time. It also expects that a further 4 employees will leave during the year.
The remuneration expense for the year ended 30 June 2014 for Leo is:

Accepted Answer

A)  $35 833 
B)  $53 750 
C)  $58 750 
D)  $117 500 
A)  $35 833 
B)  $53 750 
C)  $58 750 
D)  $117 500

Question 5

Salt Limited grants 1000 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 $5.00 at grant date and $7.50 at vesting date.
The amount to be recognised as an expense by Salt in year 2 is:

Accepted Answer

A)  $250 000 
B)  $375 000 
C)  $500 000 
D)  $750 000 
A)  $250 000 
B)  $375 000 
C)  $500 000 
D)  $750 000

Question 6

Which of the following is NOT within the scope of IFRS 2 Share-based Payment.

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

In relation to equity instruments granted by an entity where the entity makes modifications to the terms and conditions attaching to the grant:

Accepted Answer

A)  the incremental fair value is measured as the difference between the fair value of the modified instrument, estimated at the date of modification and that of the original equity instrument, estimated at the date of original granting. 
B)  if the modification occurs during the vesting period the incremental fair value is recognised immediately. 
C)  terms or conditions may not be modified in a manner that is not beneficial to the employee. 
D)  where the exercise price of options is modified, the fair value of the options changes. 
A)  the incremental fair value is measured as the difference between the fair value of the modified instrument, estimated at the date of modification and that of the original equity instrument, estimated at the date of original granting. 
B)  if the modification occurs during the vesting period the incremental fair value is recognised immediately. 
C)  terms or conditions may not be modified in a manner that is not beneficial to the employee. 
D)  where the exercise price of options is modified, the fair value of the options changes.

Question 8

On 1 July 2013 Diamond Ltd granted 800 share options with an exercise price of $35 to the CFO, conditional on the CFO remaining in employment with the company until 30 June 2016. The exercise price will drop to $30 if Diamond's earnings increase by an average of 8% per year over the three year period. On 1 July 2013 the estimated fair value of the share options with an exercise price of $35 is $10 per option, and if the exercise price is $30, the estimated fair value of the options is $12 per option.
During the year ended 30 June 2014 Diamond's earnings increased by 10% and they are expected to continue to increase at this rate over the next two years.
During the year ended 30 June 2015 Diamond's earnings increased by 5% and Diamond management expected that the earnings target would be achieved.
During the year ended 30 June 2016 Diamond's earnings increased by 11%.
When calculating the remuneration expense to be recognised for the year ended 30 June 2015 which of the following dollar values should be included in the calculation?

Accepted Answer

A)  $10 
B)  $12 
C)  $30 
D)  $35 
A)  $10 
B)  $12 
C)  $30 
D)  $35

Which of the following is within the scope of 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 is NOT within the scope of IFRS 2 Share-based Payment.

In relation to equity instruments granted by an entity where the entity makes modifications to the terms and conditions attaching to the grant:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters

Exam 8: Share-Based Payments

Which of the following is within the scope of 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 is NOT within the scope of IFRS 2 Share-based Payment.

In relation to equity instruments granted by an entity where the entity makes modifications to the terms and conditions attaching to the grant:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Inventories

Employee Benefits

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters