Cash settled employee share based payment plans

Accountancy

Can anyone explain cash settled plan with an example...

Sajeetha R

CA Final

★ 46K+

25-Jul-22 18:25

408

Answers (6)

Agreed price - 100 Actual price- 130 Difference of 30 is paid (Share appreciation rights)

CA Suraj Lakhotia

Admin

25-Jul-22 18:32

CA Suraj Lakhotia Admin

Agreed price - 100 Actual price- 130 Difference of 30 is paid (Share appreciation rights)

130 is liability to be paid for employees.,based on that liability enterprise,takes fair value at 130, re measure it,, actually issues at 100 under ESOP..balance 30 in the form of cash... Is it right?,if it wrong correct me..in sm concept is not elaborated.

Thread Starter

Sajeetha R

CA Final

★ 46K+

25-Jul-22 18:39

In cash settled transactions, equity is not issued. So the employee will get difference between the agreed strike price and actual price on exercise date.

CA Suraj Lakhotia

Admin

25-Jul-22 19:15

CA Suraj Lakhotia Admin

In cash settled transactions, equity is not issued. So the employee will get difference between the agreed strike price and actual price on exercise date.

What is the pupose or benefits lying this plan sir ?

Thread Starter

Sajeetha R

CA Final

★ 46K+

25-Jul-22 19:22

Thread Starter

Sajeetha R

What is the pupose or benefits lying this plan sir ?

Employee will get cash based on growth of the company

CA Suraj Lakhotia

Admin

26-Jul-22 10:17

CA Suraj Lakhotia Admin

Employee will get cash based on growth of the company

Thank u sir

Thread Starter

Sajeetha R

CA Final

★ 46K+

26-Jul-22 10:26