ICAI

Accounting for Share-based Payments – ICAI Guidance Note

Accounting for Share-based Payments – ICAI Guidance Note 

In an equity-settled share-based payment, the employer company offers equity shares (including share options) as consideration in lieu of services of the employees. 

In India large number of entities in India are involved in share-based payment transactions. 

Such payments are also used by employers to give incentive to their employees to reward them for their efforts in improving its performance and remain committed to the Company.

Such payments are also offered to non-employees also including vendors and it is not limited to merely stock options to employees but also covers vendors for supply of goods and services. Indian Accounting Standard IndAS 102 already covers the share-based payments to non-employees.

ICAI Guidance Note on Accounting for Share-based Payments

ICAI has issued this Guidance Note to provide a uniform accounting principles and practices for all types of share-based payments for the companies following Accounting Standards under Companies (Accounting Standards) Rules, 2006, as amended under Section 133 of Companies Act, 2013.

As per the Guidance Note a share-based payment can be accounted for by adopting the fair value method or the intrinsic value method.

Download ICAI Guidance Note on Accounting for Share-based Payments Click Here >>

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