If the Arrangement in a Share-Based Transaction Provides Either the Entity

question 15

Multiple Choice

If the arrangement in a share-based transaction provides either the entity or the counter party with the choice of cash settlement or issuance of the equity instruments,what is the accounting treatment required in AASB 2?

• A) Similar treatment with cash-settled transactions if the entity has incurred a liability to settle in cash or other assets.
• B) Similar treatment with equity-settled transactions if the entity has not incurred a liability.
• C) Where the other party has the right to choose the settlement basis then it should be accounted for simular to a compound financial instrument.
• D) All of the given answers.
• E) Similar treatment with cash-settled transactions if the entity has incurred a liability to settle in cash or other assets and similar treatment with equity-settled transactions if the entity has not incurred a liability.

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Definitions:

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