IFRS for SMEs) IFRS for SMEs Employee Benefits and Share-Based Payment 2

Question 1

Under IFRS for SMEs, how are termination benefits recognized?

Accepted Answer

When the entity is demonstrably committed to providing termination benefits

Answer

Termination benefits are recognized when the entity is demonstrably committed to terminating employment before normal retirement or providing benefits as an offer to encourage voluntary redundancy.

Question 2

Under IFRS for SMEs, profit-sharing and bonus payments are recognized as a liability when:

Accepted Answer

The entity has a present legal or constructive obligation to make such payments

Answer

A liability for profit-sharing or bonuses is recognized when the entity has a present obligation arising from past events and a reliable estimate can be made.

Question 3

Under IFRS for SMEs, equity-settled share-based payment transactions are measured at:

Accepted Answer

Fair value of the equity instruments granted at the grant date

Answer

Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date and recognized over the vesting period.

Question 4

Under IFRS for SMEs, cash-settled share-based payments are measured at:

Accepted Answer

Fair value of the liability remeasured at each reporting date

Answer

Cash-settled share-based payments (e.g., stock appreciation rights) are measured at the fair value of the liability at each reporting date until settled.

Question 5

If a share option plan has a three-year vesting period, IFRS for SMEs requires the share-based payment expense to be recognized:

Accepted Answer

Evenly over the three-year vesting period

Answer

The expense for equity-settled share-based payments with vesting conditions is recognized over the vesting period as employees render service.

IFRS for SMEs (IFRS for Small and Medium-sized Entities (SMEs)) Practice Test

IFRS for SMEs (IFRS for Small and Medium-sized Entities (SMEs)) Practice Test

IFRS for SMEs) IFRS for SMEs Employee Benefits and Share-Based Payment 2