Under IFRS 2, with Respect to Choice-Of-Settlement Share-Based Payments, If

question 37

Multiple Choice

Under IFRS 2, with respect to choice-of-settlement share-based payments, if the supplier chooses the cash settlement, the entity is deemed to have issued a compound financial instrument consisting of debt and equity. When cash is received, how does the supplier apply it?

• A) Only against the equity portion
• B) Apportioned between debt and equity based on relative fair market value of each component
• C) Only against current year liabilities
• D) Only against the debt portion

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