Questions on the accounting of cash settled plan

[Leo]

Hi everyone,

Our company has issued in 2017 a particular cash-settled plan which name is share subscription warrants to 20 top management members of the company.

The warrant was issued by a subsidiary A of the company.

In the contract, there is one clause telling that, if the warrant is converted into shares, the HQ would buy them immediately by cash. In that way, our auditors has qualified this type of plan as cash-settled.

Here comes my question :

In the local gaap, in the books of Subsidiary A, nothing is booked until the exercising date. The accounting entry was the following :
Dt Reserves (BS Equity) 60
Cr Capital nominal (BS Equity) 10
Cr Share premium (BS Equity) 50

In the local gaap also, in the books of the HQ, nothing is booked until the exercising date. The accounting entry was the following :

Dt Investment in subsidiary companies (BS Assets) 60
CR Bank (BS assets) 60

In IFRS, I should account the plan as cash settled, so I should book it as the following (vesting period 3 years, fair value 60 and no exercising probability to simplify) :

All entries are booked in Subsidiary A :

Dt Charges (P&L) 20
Cr Debt (BS Liabilities) 20

So, at the exercing date, I should have :
Reserves (40)
P&L (20)

Debt 60

And this is my question, I think Ishould book the following entries on top of the local accounting entries :

Dr Debt 60
Cr Reserves 60



Is that correct for you? What do you think?

Thank you

[Marek Muc]

any chance you will be able to pose this question succinctly without asking us to go through all the debits and credits?

[Leo]

Hi Marek,

Thank you for your feedback, I ll be succint next time.

No problem.

Thank yo again.