Misleading remuneration disclosures

Multiple-choice questions. In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please reread the article before attempting the questions again.

Which of the following items is not covered within IFRS 2 Share-based payment?

Cash-settled schemes

Equity-settled schemes

Defined benefit pension schemes

Transactions with third parties

What value should be applied to share-based payment transactions with third parties?

Fair value of the option at the grant date

Fair value of the option at the reporting date

Estimated fair value of the option at the vesting date

Fair value of the goods received

What value should be applied to equity-settled share-based payment schemes?

Estimated fair value of the option at the vesting date

Fair value of the goods received

Fair value of the option at the grant date

Fair value of the option at the reporting date

What value should be applied to cash-settled share-based payment schemes?

Fair value of the goods received

Fair value of the option at the grant date

Fair value of the option at the reporting date

Estimated fair value of the option at the vesting date

How should a bonus paid to employees based on the price of an entities shares be accounted for under IFRS 2 Share-based payment?

Outside the scope of IFRS 2

A transaction with third parties

A cash-settled share-based payment transaction

An equity-settled share-based payment transaction

Which of the following is not a criticism of the grant date fair value model?

The figures in the financial statements can reflect out of date information

Fair value of options are difficult to calculate as too much judgement is required

It provides less relevant information as it is based on calculations which do not reflect the value of option to be given

It provides out of date information

Which of the following represents an area that the FRC thematic review notes was done well?

Clear identification of equity-settled and cash-settled schemes

Including concise disclosures

Consistent and clear application of expenses within APMs

Identifying the valuation models used

Which, if any, of the following statements is correct? Statement 1, The grant date fair value model will produce figures with greater volatility than the reporting date fair value model. Statement 2, The grant date fair value model is an approximation of the value of the service received from employees rather than the value of the option to be given

Neither statement is correct

Both statements are correct

Statement 1 only is correct

Statement 2 only is correct

What is the name of the UK body that produced the thematic review on IFRS 2?

Securities and Exchange Commission

Financial Reporting Council

Financial Conduct Authority

IFRS Foundation

Where else may information on share-based payments be disclosed in the annual report?

Directors' report

Related parties note

Remuneration note

All of these

1 Unit

Misleading remuneration disclosures

Which of the following items is not covered within IFRS 2 Share-based payment?

What value should be applied to share-based payment transactions with third parties?

What value should be applied to equity-settled share-based payment schemes?

What value should be applied to cash-settled share-based payment schemes?

How should a bonus paid to employees based on the price of an entities shares be accounted for under IFRS 2 Share-based payment?

Which of the following is not a criticism of the grant date fair value model?

Which of the following represents an area that the FRC thematic review notes was done well?

What is the name of the UK body that produced the thematic review on IFRS 2?

Where else may information on share-based payments be disclosed in the annual report?

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