when must the entity choose the cash settlement?
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please explain why the option is correct and remaining incorrect
Under IFRS 2, with respect to choice-of-settlement share-based payments, if it is the entity that has the right to choose between equity settlement and cash settlement, when must the entity choose the cash settlement?
Group of answer choices
If the entity has a present obligation to settle in cash
If the supplier provides goods
The entity always has the option to choose either method.
If the supplier provides services
Step by step
Solved in 2 steps
- A share-based payment transaction is one in which an entity receives goods or services and pays for them Select the correct response: through cash, but the amount is based on the fair value of the entity's equity instruments. any of these by issuing its own equity instruments either by issuing its own equity instruments or through cash, but the amount is based on the fair value of the entity's equity instruments., as a choice given to either the entity or the supplier of the goods or servicesIf the share-based payment transactions provide a choice whether the entity settles in cash or issues equity instruments, the entity is required to account for the transaction as I. Cash settled share-based payment transaction if and to the extent that the entity has incurred a liability to settle in cash or other assets. II. Equity settled share-based payment transaction if and to the extent that no liability has been incurred by the entity. A. II only B. Neither I nor II C. Either I or II D. I onlywhich one is correct please confirm? Q4: Options are contracts that give the purchasers the option to buy or sell an underlying asset the obligation to buy or sell an underlying asset. the right to hold an underlying asset. the right to switch payment streams.
- A share-based payment transaction with cash alternative whereby the right of choice of settlement is retained by the entity is accounted for as equity-settled cash-settled either cash-settled or equity-settled, but not both partly cash-settled and equity-settledFair Value Measurement Concept Question: What does it mean when fair value is paid to transfer a liability in an orderly transaction between market participants at the measurement date? Please explain or give an example for understanding.A swap contract Select one: A. relates to the trading of an asset owned by one company for another owned by a second company. B. is an arrangement between two or more parties to exchange future cash flows. C. can be used to increase or decrease the ratio of fixed and variable interest costs in its cost structure. D. Both B and C are true.
- In accordance with PFRS 2, Share-based Payment, how should an entity recognize the change in fair value of the liability in respect of a cash-settled share-based payment transaction? Group of answer choices Do not recognize in the financial statements but disclose in the notes thereto. Recognize in other comprehensive income. Recognize in the statement of changes in entity. Recognize in profit or loss.The amount of consideration to which the entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties" is the definition of Select one: O a. the contract. O b. the performance obligation. O c. the transaction price. - O d. the consideration..X transfers a marketable equity security to Y.For each of the following transferprovisions [considered independently], consider the affected requirement for transfer offinancial assets.a.Y may not use the security as collateral for a loan. How should X account for thetransfer? Why? b.X attaches a call to the security, having an exercise price of $50. How should Xaccount for the transfer if the price is highly unlikely to rise to $50? Why?
- According to the fair value principle, assets and liabilities should be reported Select answer from the options below 1.at their fair market value. 2.at their historical cost. 3.at a value agreed upon by interested parties. 4.at cost plus inflation.Forward contracts are: Answer a. Contracts usually involving the exchange of a commodity or financial instrument. b. Easily resold c. Always standardized d. An agreement between more than two parties16. With regard to contracts that can be settled in either cash or shares IFRS requires that share settlement must be used. IFRS gives companies a choice of either cash or shares. GAAP requires that share settlement must be used. the FASB project proposes that the IASB adopt the GAAP approach, requiring that share settlement must be used.
