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Question – 1 : Company B grants 500 shares options each to 100 employees. The employees will be
entitled to exercise these options if they stay for 3 years. The fair value of each option is estimated to
be Rs. 15 on the date of grant. The fair values are Rs. 18, Rs. 25 and Rs. 30 at the end of year 1, year 2
and year 3. Assume it to be a Equity Settled Plan. The employee service cost to be debited to Profit or Loss account at the end of year 1 is -
A : Rs. 750,000 [500 shares x 100 employees x Rs. 15]
B : Rs. 250,000 [500 shares x 100 employees x Rs. 15 = Rs. 750,000 / 3 years ]
C :Rs. 300,000 [500 shares x 100 employees x Rs. 18 = Rs. 900,000 / 3 years ]
D : None of the above
entitled to exercise these options if they stay for 3 years. The fair value of each option is estimated to
be Rs. 15 on the date of grant. The fair values are Rs. 18, Rs. 25 and Rs. 30 at the end of year 1, year 2
and year 3. Assume it to be a Equity Settled Plan. The employee service cost to be debited to Profit or Loss account at the end of year 1 is -
A : Rs. 750,000 [500 shares x 100 employees x Rs. 15]
B : Rs. 250,000 [500 shares x 100 employees x Rs. 15 = Rs. 750,000 / 3 years ]
C :Rs. 300,000 [500 shares x 100 employees x Rs. 18 = Rs. 900,000 / 3 years ]
D : None of the above
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Question – 2 : _____ date is the date on which the entity and the other party agree to the share-
based payment arrangement and shares the principal terms and conditions.
A : Grant date
B : Inception date
C : Vesting date
D : Exercise date
based payment arrangement and shares the principal terms and conditions.
A : Grant date
B : Inception date
C : Vesting date
D : Exercise date
(i) Share-based payment relating to an acquisition of a subsidiary involving the issuance of shares
does not come within the Scope of a “share-based” payment as covered under Ind-AS 102?
_________
does not come within the Scope of a “share-based” payment as covered under Ind-AS 102?
_________
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(ii) Ind-AS 102 Share based payments would not apply if Preference Shares, being an equity
instrument, are issued to a supplier in exchange for goods supplied. _____________
instrument, are issued to a supplier in exchange for goods supplied. _____________
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(iii) Ind-AS 102 does not apply to share-based payment transactions other than for the acquisition
of goods and services. ____________
of goods and services. ____________
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(iv) The vesting period is a period during which all the specified vesting conditions of a share-based
payment arrangement are to be satisfied as per Ind-AS 102? ______________
payment arrangement are to be satisfied as per Ind-AS 102? ______________
Anonymous Quiz
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13%
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Q1. PMP Ltd. is an associate of PMP Inc, a company based in Kuwait. PMP Ltd. is listed in India having its corporate office at Assam. The company’s operations have remained stable over the years and the management is looking to expand the operations for which the management is considering different business ventures.
The company’s auditors issued clean audit report on the audit of the financial statements for the year ended 31st March 2022.
For the financial year ended 31st March 2023, the auditors made some changes in their audit team. While the audit partner remained the same, the field incharge has been replaced, as the field incharge who was engaged in the audit of the financial statements for the year ended 31st March 2022 has left the firm. The audit team has a new person as External Quality Control Reviewer (EQCR) who has specialized knowledge of the industry in which the company is operating. EQCR has been employed with the firm for over 2.5 years and is yet to clear his CA (Chartered Accountancy) final exams. The changes were made on the basis of the consideration that the firm has enough experience of engagement with this client.
The audit team commenced the work for audit of the year ended 31st March 2023 after detailed planning and it was observed that EQCR had various comments on certain matters which were not accepted by the audit partner. Audit partner had better understanding of the client and after assessing the comments of the EQCR did not find those relevant.
The audit partner without concurrence of the EQCR finalized the audit and issued the audit report.
In the given situation, please advise which one of the following is correct?
Options:
A. The changes in the audit team were not appropriate except for the field incharge who had left the firm. EQCR should have been a member of the Institute of Chartered Accountants of India (ICAI).
B. The audit partner did the right thing by ignoring the comments of EQCR as he is the final authority to decide on any matter and take decisions. Further EQCR was junior to the audit partner.
C. The audit partner must discuss each and every comment of EQCR with the client and ensure that a proper disclosure in respect of those points should be made either in the financial statements or the audit report.
D. EQCR had sufficient and appropriate experience. He should have been given the authority to objectively evaluate various matters, before the report is issued, the significant judgments the engagement team made and the conclusions they reached in formulating the report. By ignoring the comments of the EQCR, audit partner took additional professional responsibility on himself. By considering the comments of EQCR, he could have passed the responsibility to EQCR.
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