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iSignthis Limited Share Based Payment Analysis

   

Added on  2020-05-28

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Running head: ADVANCE ACCOUNTING PRINCIPLESAdvance Accounting PrinciplesName of the Student:Name of the University:Author Note
iSignthis Limited Share Based Payment Analysis_1

1ADVANCE ACCOUNTING PRINCIPLESTable of ContentsAnswer to Part a...............................................................................................................................2Business memorandum................................................................................................................2Answer to Part b..............................................................................................................................4References........................................................................................................................................7
iSignthis Limited Share Based Payment Analysis_2

2ADVANCE ACCOUNTING PRINCIPLESAnswer to Part aBusiness memorandumTo:From: Alpha LimitedSubject: AASB 2 Share based Payment DisclosureDate: January 12, 2018The issue that has been presented in the question is that the share option plan that ispresented by Alpha Ltd for its officers, consultants and employees operates at 10% of itsoutstanding shares. It has been further stated that the exercise price of each option is equal to theclosing market price of the shares on the day before the grant. Furthermore, each option has aterm of 5 years and vests one third on each of the three years following grant date. Now, all theseinformation is critical and should be disclosed in proper format in the financial statements ofAlpha Ltd so that the accounting statements facilitate the true and fair view of the financialcondition of the company. The Australian Accounting Standards Board has established theAASB 2 for the purpose of outlining the disclosures that will be need to made in the financialstatements (Barth 2015).The Australian Accounting Standards Board states that an entity shall apply that theStandard for the purpose of accounting the entire share-based payment transactions including allthe equity settled share based payment transactions, cash settled share based paymenttransactions and the transactions in which the entity receives and acquires goods or services andthe supplier or the entity of those goods or services gets the providence of settling thetransactions in cash or equity instruments. In order to understand the proper format of thedisclosure in which Alpha Limited must state the share based payment information in the annualreport of the company, the term share based payment must be at first understood (Cheung andLau 2016). The term shared based payment as mentioned in AASB 2, refers to the transfers that anentity makes in the form of equity instruments by its shareholders to the parties that have
iSignthis Limited Share Based Payment Analysis_3

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