Page 32 - 20. COMPILER QB - INDAS 102

Q22. (December 21 – 6 Marks) – (Similar to Q.13)

On 1st April, 2020.21, Grocery limited gave options to its key management personnel (employees) to take
either cash equivalent to 650 shares or 810 shares. The minimum service requirement is 2 years and shares

being taken must be kept for 4 years.
Fair values of the shares are as follows: Rs.

Share alternative fair value (with restrictions) 460
Grant date fair value on 1st April, 2020.21 480
Fair value on 31st March, 20X2 530

Fair Value on 31st March, 20X3 560
The employees exercise their cash option at the end of 2021-2022. Pass the journal entries.
SOLUTION

1st April, 2020-21 31st March, 31st March,
20X2 20X3
Rs. Rs. Rs.
Equity alternative (860 x 460) 3,72,600

Cash alternative (650 x 480) 3,12,000
Equity option (3,72,600 – 3,12,000) 60,600

Cash Option (cumulative) (650 x 530 x ½)
(using period end fair value) 1,72,250 1,91,750
Equity Option (cumulative) (40,000 x ½) 30,300
30,300

Expense for the period
Equity option 30,300 30,300

Cash Option 1,72,250 1,91,750
Total 2,02,550 2,22,050

Journal Entries
31st March, 2021 Rs.

Employee benefits expenses Dr. 2,02,550
To Share based payment reserve 30,300

(equity)*
To Share based payment liability 1,72,250

(Recognition of Equity option and cash settlement option)
31st March, 20X3

Employee benefits expenses Dr. 2,22,050
To Share based payment reserve 30,300
(equity)*

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