IFRS2 - share based payment

[Leo]

Hi everyone,

I have a question concerning a share-based plan, specifically on the accounting entry schemes at the exercise date.

Take a plan with a vesting period of three years for example. The company is a no listed company and the fair value of the plan is 9€ per share and the nominal value is 1 € per share.

There is 100 share options issued so each year my accounting entry in IFRS would be :

dt : expense 300 €
Cr : Other consolidated reserves 300€

At the end of the period, the exercice date, those shares will be exercised. And that would be translated in accounting by a capital add in with the following accounting entry :

dt : Other consolidated reserves 100€ (because nominal value)
Cr : Capital 100€

Do I have to do any other accounting entry? I mean, I just leave what I booked 800€ (900€-100€) in other consoldiated reserves?

Thank you for your help !

BR

[Marek Muc]

you can leave it as it is, but it's best just to transfer it to retained earnings and forget it
https://ifrscommunity.com/knowledge-bas ... hin-equity

[Leo]

Oh great !

Thanks again and again.

[Leo]

I do have another question though, I couldn't find the answer in any documentation.

The free shares are exercised within one year period after issued, but the vesting period is 4 years (because the performance condition was defined in paper for 4 years).

So, from my understanding, as the shares are booked following the vesting period and no exercise period so I maintain the period of accounting the plan for 4 years no matter when the shares were exercised?

Am I correct?

Thank you.

[Marek Muc]

I don't quite understand, what was this performance condition? was it met after 1 year?

[Leo]

The legal acquisition period is 1 year, which is the explicit condition, however, the call/put conditions (which belongs to the family holders) specified that employees has to keep providing their services to the company for 4 years in order to benefit fully from the appreciation of the value of the shares. So, regards to this implicit condition, we have determined that the vesting period is 4 years.

BR

[Marek Muc]

still a bit confusing to me, so what happens with the shares if an employee leaves the company after 3 years?

[Leo]

If this person leave after 3 years, he will be paid at the price of the initial investment which means 1€ for all the shares.

[Marek Muc]

ok so it seems that the vesting period is 4 years as you said