In a share-based payment transaction like an option,which of the following accounting treatments is incorrect?
A) An entity shall recognise the goods or services received or acquired in a share-based payment transaction when it obtains the goods or as the services are received.
B) The entity shall recognise a corresponding increase in equity if the goods or services were received in an equity-settled share-based payment transaction.
C) The entity shall recognise a corresponding increase in liability if the goods or services were acquired in a cash-settled share-based payment transaction.
D) Goods or services received or acquired in a share-based payment transaction shall be recognised as expenses.

Question

Quizplus · Accepted Answer

The statement "Goods or services received or acquired in a share-based payment transaction shall be recognised as expenses" is incorrect. The correct accounting treatment is to recognise the fair value of the goods or services received as either an increase in equity (in an equity-settled transaction) or a liability (in a cash-settled transaction). These amounts are not considered expenses until they are ultimately settled.

In a Share-Based Payment Transaction Like an Option,which of the Following