1.

Under PFRS 2 – Shares – Based Compensation, a cash-settled share-based payment

transaction will increase which of the following?
Group of answer choices

A noncurrent asset

Equity

A liability

A current asset

2. Which of the following statement in relation to share options granted to employees in

exchange for their services is true?
I.      The service received shall be measured at the fair value of the employees’ services.
II.      Fair value shall be measured at the date the option vest.
Group of answer choices

I only

Neither I nor II

Both I and II

II only

For transactions with employees and other providing similar services, the fair value of the
equity instrument granted is measured on
Group of answer choices

Exercise date

Beginning of the year grant

Grant date

End of reporting period

The payment for services in cash and based upon the price of the entity’s ordinary shares is
what type of share – based payment transaction?
Group of answer choices

Cash – settled share – based payment transactions.

Liability – settled share – based payment transactions.

Asset –settled share –based payment transactions.

Equity – settled share – based payment transactions.

If share-based payment transaction provides a choice whether the entity settles in cash or
issues equity instrument, the entity is required to account for the transaction as
I.      Cash settled share-based payment transaction if the entity has incurred a liability to settle
in cash or other asset.
II.      Equity settled share-based payment transaction if no liability has been incurred by the
entity.
Group of answer choices

I only

Either I or II

Neither I nor II

II only

An entity has entered into a contract with another entity which will supply a range of services.
The payment for those services will be in cash and based upon the prices of the entity’s
ordinary shares on completion of the contract. In accordance with PFRS 2, what type of share-
based payment transaction does this represent?
Group of answer choices

Equity settled share-based payment transaction

Liability settled share-based payment transaction

Asset settled share-based payment transaction

Cash settled share-based payment transaction

Share options are what type of share – based payment transactions?

Group of answer choices

Equity – settled share – based payment transactions.

Asset –settled share –based payment transactions.

Cash – settled share – based payment transactions.

Liability – settled share – based payment transactions.

For equity share-based payment transaction, the entity shall measure the goods or services
received and the corresponding increase in equity.
I.      Directly, at the fair value of the goods or services received.
II.      Indirectly, by reference to the fair value of the equity instrument grated, if the fair value of
the good or services received cannot be estimated reliably.
Group of answer choices

Neither I nor II

I only

Both I and II

II only
Nine wala

Which of the following is true regarding the requirement of PFRS 2?

Group of answer choices

Small entities are exempt

There are no exemptions from PFRS 2.

Private entities are exempt

Subsidiaries using their parent entity’s shares as consideration for goods and services are
exempt.

Under IFRS 2, Share Based Payment, the value of the options that lapse after vesting shall
Group of answer choices

Remain in equity.

Be credited to expense during the period the options lapse.

Be converted into a liability.

Be credited to income during the period that the options lapse.

These are transactions in which the entity acquires goods or services by incurring liabilities to
the supplier of those goods or services for amounts that are based on the price of the entity’s
shares and other equity instruments.
Group of answer choices

Equity transactions

Cash settled share-based payment transactions

Cash payment transactions

Purchase transactions

These are transaction in which the entity receives goods or services as consideration for equity
instruments of the entity, including shares and share options.
Group of answer choices

Cash payment transaction

Equity payment transaction

Cash settled share-based payment transaction

Equity settled share-based payment transaction

Many shares and most shares options are not traded in an active market. Therefore, it is often
difficult to arrive at a fair value of the equity instrument being used. Which of the following
option valuation techniques should not be used as a measure of fair value in the first instance?
Group of answer choices

Binomial method

Intrinsic value

Black-scholes model

Monte-carlo model

It is the difference between the fair value of the shares to which the counterparty has the right
to subscribe and the price the counterparty is required to pay for those shares
Group of answer choices

Book value

Intrinsic value

Market value

Fair value

When should the compensation expense be recorded as a result of share options granted by
the enterprise to its employees?
Group of answer choices
During the year that the options ultimately vest

During the year when the option first becomes exercisable

During the year of grant

During the years when services are required to be rendered by the employees

What is the date on which the fair value of the equity instrument granted is measured?
Group of answer choices

End of reporting period

Exercise date

Grant date

Measurement date

It is the difference between the fair value of the shares to which the counterparty has the right
to subscribe and the price the counterparty is required to pay for those shares.
Group of answer choices

Intrinsic value

Fair value

Book value

Market value

For cash settled share-based payment transaction, an entity shall measure the goods or services
received and the liability incurred at
Group of answer choices
Neither fair value of the goods and services received nor the fair value of the liability.

Either fair value of the goods and services received or the fair value of the liability

Fair value of the goods and services received

Fair value of the liability

Which of the following transaction involving the issuance of shares does not come within the
identification of a share-based” payment under PFRS 2.
Group of answer choices

Share-based payment relating to an acquisition of a subsidiary

Employee share purchase plans

Share appreciation rights

Employee share option plans

How should an entity recognize the change in the fair value of the liability in respect of a cash
settled share-based payment transaction?
Group of answer choices

Should recognize in other comprehensive income

Should recognize in the statement of changes in equity

Should not recognized in the financial statements but disclose in the notes

Should recognize in profit or loss

For cash settled based share-based payment transaction, until the liability is settled, the entity
is required to re-measure the fair value of the liability at each reporting date and at the date of
settlement and any changes in fair value are
Group of answer choices
Not recognized

Included in retained earnings

Included in profit or loss

Treated as component other comprehensive income

Next 

Which of the following statement in relation to a cash settled share-based payment transaction
is true?
I.      The fair value of the liability shall be re-measured at the end of each reporting periods.
II.      The fair value of the liability shall be re-measured at the date of settlement.
Group of answer choices

Both I and II

I only

Neither I nor II

II only

It is the date on which the entity and another party agree to a share-based payment
arrangement, being when the entity and the counterparty have a shared understanding of the
terms and conditions of the arrangement.
Group of answer choices

End of reporting period

Grant date

Measurement date

Exercise date
It is the date on which the entity and another party agree to a share-based payment
arrangement, being when the entity and the counterparty have a shared understanding of the
terms and conditions of the arrangement.
Group of answer choices

Grant date

Balance sheet date

Exercise date

Measurement date
Under PFRS 2, cash settled share-based payment transaction will increase which of the
following?
Group of answer choices

Equity

A liability

A current asset

A noncurrent asset

Which statement is not true about share options?

Group of answer choices

The date on which the total compensation expense is computed in share option plan is the date
of grant.

The fair value of share options is measured at the date the options vest.

Compensation expense in a share option plan is generally allocated to periods benefited by the
employee’s required service.

Compensation expense in a share option plan is recognized immediately when the share
options vest immediately.
In what circumstances is compensation expense immediately recognized under a share option
plan?
Group of answer choices

In circumstances when the options are exercisable within two years for services rendered over
the next two years.

In all circumstances

In circumstances when the options are granted for prior service and the options are
immediately exercisable

In no circumstances is compensation expense immediately recognized.

Which statement is true about share appreciation right?

Group of answer choices

Compensation expense in a share appreciation right is generally allocated over the service
period of employees.

The measurement date for computing compensation in a share appreciation right is the date of
exercise.

A cash settled share – based payment transaction shall give rise to an increase in liability.

All of these statements are true about share appreciation right.

The entity has issued a range of share options to employees. In accordance with PFRS 2, what
type of share-based payment transaction does this represent?
Group of answer choices

Equity settled share-based payment transaction

Liability settled share-based payment transaction

Cash settled share-based payment transaction

Asset settled share-based payment transaction