chapter 24

Measure the fair value of share options using an option pricing model.

Intrinsic value

Equity-settled share-based payment transaction

Fair value shall be measured at the date of grant.

The risk-free interest rate

The estimated fair value of the options

Measuring the compensation expense during the service period.

Using the fair value method

A change in accounting estimate

If previous experience indicates that share options shall be forfeited before vesting, the fair value estimate on grant date should be adjusted.

Intrinsic value

Is based on the fair value of the share option at the grant date, adjusted for forfeitures

Whether the share options are issued in lieu of salary

In circumstances when the options are immediately exercisable.

Allocated over the periods benefited by the employee's required service.

When the entity receives the goods or services.

The employees are unconditionally entitled to the share-based payments.

At the fair value of the goods or services received unless that fair value cannot be estimated reliably.

On the grant date.

When the entity obtains the goods or the counterparty renders service.

Revise the estimate to equal the number of equity instruments that ultimately vest for vesting conditions based on employee service and based on nonmarket performance.

Cash-settled share-based payment transaction unless the entity has a past practice of settling by issuing equity instrument or the option to settle in cash has no commercial substance.

Uses observable market price and other measures according to a measurement hierarchy.

Take the modified vesting condition into account only if it is beneficial to employees and recognize the increase in fair value over the remaining vesting period from date of the modification.