Page 26 - 20. COMPILER QB - INDAS 102

SOLUTION

Number of SARs = 80 Employees x 500 SARs = 40,000 SARs

1. When the term of the awards is 4 years of service
Period Fair To be Cumulative Expense in proportion to the Cumulative
value vested award earned expenses
recognized
A b c = 40,000 d = [{(c / no. of total E
x a x b years) x years completed}
– e of pvs year]

st
1 April, 2017 100 100% 40,00,000 - -

st
31 March, 2018 110 100% 44,00,000 11,00,000 11,00,000

st
31 March, 2019 120 100% 48,00,000 13,00,000 24,00,000

st
31 March, 2020 115 100% 46,00,000 10,50,000 34,50,000

st
31 March, 2021 130 100% 52,00,000 17,50,000 52,00,000

Journal Entries

st
31 March, 2018
Employee benefits expenses/Profit and Loss A/c Dr. 11,00,000
To Share based payment liability 11,00,000
(Fair value of SARs has been recognised)

st
31 March, 2019
Employee benefits expenses/Profit and Loss A/c Dr. 13,00,000
To Share based payment liability 13,00,000
(Fair value of SARs has been re-measured)

st
31 March, 2020
Employee benefits expenses/Profit and Loss A/c Dr. 10,50,000
To Share based payment liability 10,50,000
(Fair value of SARs has been recognized)

st
31 March, 2021
Employee benefits expenses A/c Dr. 17,50,000
To Share based payment liability 17,50,000
(Fair value of SARs has been recognized)

2. When the term of the awards is modified to 3 years of service instead of 4 years of service

Period Fair %age of Cumulative Expense in proportion to Cumulative expenses
value vesting the award earned recognized

a b c = 40,000 x d = [{(c / total years) x e
a x b years completed} – e of
pvs year]

st
1 April, 2017 100 100% 40,00,000 - -

st
31 March, 2018 110 100% 44,00,000 11,00,000 11,00,000

st
31 March, 2019 120 100% 48,00,000 21,00,000 32,00,000

st
31 March, 2020 115 100% 46,00,000 14,00,000 46,00,000
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