In Relation to Equity Instruments Granted by an Entity Where

question 4

Multiple Choice

In relation to equity instruments granted by an entity where the entity makes modifications to the terms and conditions attaching to the grant,

• A) the incremental fair value is measured as the difference between the fair value of the modified instrument, estimated at the date of modification and that of the original equity instrument, estimated at the date of original granting.
• B) if the modification occurs during the vesting period the incremental fair value is recognised immediately.
• C) terms or conditions may not be modified in a manner that is not beneficial to the employee.
• D) where the exercise price of options is modified, the fair value of the options changes.

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Definitions:

Tax Contingency Reserve

A tax contingency reserve is an accounting provision made to cover potential tax liabilities that may arise due to uncertainties in the interpretation of tax laws or disputes with tax authorities.

Earnings Quality

An assessment of the true income generated by a company, gauging how accurately the reported income reflects the company's true earning power.

Deferred Tax Assets

Assets on a company's balance sheet that may be used to offset future tax liabilities.

IFRS

International Financial Reporting Standards, a set of global accounting guidelines for preparing financial statements.