[amp_mcq option1=”Employee share purchase plans” option2=”Employee share option plans” option3=”Share based payment relating to an acquisition of a subsidiary” option4=”Share appreciation rights” correct=”option3″]<\/p>\n
The correct answer is: C. Share based payment relating to an acquisition of a subsidiary<\/strong><\/p>\n Share based payment is a transaction in which an entity acquires goods or services by issuing shares or other equity instruments, or by incurring liabilities to issue such instruments in the future.<\/p>\n Employee share purchase plans and employee share option plans are both examples of share based payment transactions. In an employee share purchase plan, an entity grants its employees the right to purchase shares in the entity at a predetermined price. In an employee share option plan, an entity grants its employees the right to acquire shares in the entity at a predetermined price, but only if certain conditions are met, such as the employee remaining with the entity for a certain period of time.<\/p>\n Share based payment relating to an acquisition of a subsidiary is not a share based payment transaction. In this type of transaction, an entity acquires a subsidiary by issuing shares or other equity instruments to the shareholders of the subsidiary. This is not a share based payment transaction because the entity is not acquiring goods or services in exchange for the shares. The entity is simply exchanging shares for shares.<\/p>\n Share appreciation rights (SARs) are a type of share based payment transaction. Under a SAR arrangement, an employee is granted the right to receive cash or shares in the entity equal to the increase in the fair value of the entity’s shares over a specified period of time. SARs are a form of deferred compensation, and the employee is not entitled to the cash or shares until the SARs vest.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Employee share purchase plans” option2=”Employee share option plans” option3=”Share based payment relating to an acquisition of a subsidiary” option4=”Share appreciation rights” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-45625","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n