Which of the following share-based payment transactions are considered cash-settled transactions within the scope of AASB 2?
A) Company A grants 5000 options each to its directors in return for services to be received over two years.
B) Company B purchases machinery in exchange for shares.
C) Company C incurs a liability based on the price of the entity's share options to pay for the services of its sales executives.
D) Company A grants 5000 options each to its directors in return for services to be received over two years; Company B purchases machinery in exchange for shares.

Question

Quizplus · Accepted Answer

A cash-settled transaction is one where the entity settles the share-based payment arrangement by means of cash or other assets, rather than by issuing equity instruments. In option C, Company C incurs a liability based on the price of the entity's share options to pay for the services of its sales executives, making it a cash-settled transaction. Options A and D involve the granting of share options without any cash settlement, while option B involves the purchase of machinery in exchange for shares, making it a non-share-based payment transaction.

Which of the Following Share-Based Payment Transactions Are Considered Cash-Settled