determine whether the bold items are monetary or non monetary items in e s financial 613357

Award with employee choice of settlement with different fair values for cash-settlement and equity-settlement

An entity grants to an employee an award with the right to choose settlement in either:

• 1,000 phantom shares, i.e. a right to a cash payment equal to the value of 1,000 shares, or
• 1,200 shares.

Vesting is conditional upon the completion of three years’ service. If the employee chooses the share alternative, the shares must be held for three years after vesting date.

At grant date, the entity estimates that the fair value of the share alternative, after taking into account the effects of the post-vesting transfer restrictions, is €48 per share. The fair value of the cash alternative is estimated as:

The grant date fair value of the equity alternative is €57,600 (1,200 shares × €48). The grant date fair value of the cash alternative is €50,000 (1,000 phantom shares × €50). Therefore the fair value of the equity component excluding the right to receive cash is €7,600 (€57,600 – €50,000). The entity recognises a cost based on the following amounts.