While the accounting for both of these types of arrangements has not changed significantly in recent years, it is an area that is not well understood in practice and confusion often arises between the different types of arrangements and how to treat them.
Our ‘Insights into MFRS 2’ series is aimed at demystifying MFRS 2 by explaining the fundamentals of accounting for share-based payments using relatively simple language and providing insights to help entities cut through some of the complexities associated with accounting for these types of arrangements.
As explained in our article ‘Insights into MFRS 2 – Classification of share-based payment transactions and vesting conditions’, a share-based payment arrangement must be classified as either an equity-settled transaction or a cash-settled transaction. This article discusses the accounting for cash-settled share-based payment transactions. The accounting for equity-settled transactions is discussed in our article, ‘Insights into MFRS 2 – Equity-settled share-based payment arrangements with employees’.
Cash-settled share-based payment arrangements with employees
How we can help
We hope you find the information in this article helpful in giving you insight into aspects of MFRS 2. If you would like to discuss any of the points raised, please speak to your usual Grant Thornton contact.
