Ind AS 102, Share-based Payment, provides guidance on the accounting treatment for transactions in which an entity issues equity instruments as part of its employee compensation arrangements or in exchange for goods or services.
Under Ind AS 102, share-based payment transactions are recognized as expenses in the financial statements based on their fair value at the grant date. The fair value of equity instruments granted to employees or others is measured reliably, taking into account any conditions or restrictions attached to the instruments.
The standard requires entities to estimate the fair value of share-based payment transactions using appropriate valuation methods. It also provides guidance on measuring the fair value of equity instruments granted, including consideration of factors such as vesting conditions, performance conditions, and market-based conditions.
Recognition of the share-based payment expense is typically spread over the vesting period of the equity instruments, reflecting the services received by the entity over that period. Any subsequent modifications to share-based payment arrangements are accounted for as a change in accounting estimate.
Ind AS 102 also requires disclosure of information about share-based payment transactions, including the nature and extent of share-based payment arrangements, the measurement basis used, and the impact on the entity’s financial position and performance.
