If the arrangement in a share-based transaction provides either the entity or the counter party with the choice of cash settlement or issuance of the equity instruments,what is the accounting treatment required in AASB 2?
A) Similar treatment with cash-settled transactions if the entity has incurred a liability to settle in cash or other assets.
B) Similar treatment with equity-settled transactions if the entity has not incurred a liability.
C) Where the other party has the right to choose the settlement basis then it should be accounted for simular to a compound financial instrument.
D) All of the given answers.
E) Similar treatment with cash-settled transactions if the entity has incurred a liability to settle in cash or other assets and similar treatment with equity-settled transactions if the entity has not incurred a liability.

Question

Quizplus · Accepted Answer

AASB 2 requires different treatments depending on whether a liability is incurred or not, and if the counterparty has the choice, it is treated like a compound financial instrument.

If the Arrangement in a Share-Based Transaction Provides Either the Entity