Navin Agicha (CA Final Student) (75 Points)
09 February 2014IN SHARE BASED PAYMENTS, WHEN OPTION IS NOT EXERCED THEN WE HAVE TO TRANSFER AMOUNT IN GENERAL RESERVES.
AND IF AFTER TRANSFERING AMOUNT IN GENERAL RESERVES, CAN WE USE THAT AMOUNT FURTHER ESOP SCHEME DIRECTLY FROM GENERAL RESERVES?
AND IN LAST YEAR OF ESOP IF VESTING CONDITIONS ARE NOT SATISFIED THEN ALSO WHY WE TRANSFER AMOUNT IN PL IN LAST YEAR AND AGAIN WE TRANSFER IT IN GENERAL RESERVES?
CA. Roopali Kadam
(Jobs on assignment basis.)
(1459 Points)
Replied 01 March 2014
| Originally posted by : Navin Agicha | ||
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IN SHARE BASED PAYMENTS, WHEN OPTION IS NOT EXERCED THEN WE HAVE TO TRANSFER AMOUNT IN GENERAL RESERVES. AND IF AFTER TRANSFERING AMOUNT IN GENERAL RESERVES, CAN WE USE THAT AMOUNT FURTHER ESOP SCHEME DIRECTLY FROM GENERAL RESERVES?= AND IN LAST YEAR OF ESOP IF VESTING CONDITIONS ARE NOT SATISFIED THEN ALSO WHY WE TRANSFER AMOUNT IN PL IN LAST YEAR AND AGAIN WE TRANSFER IT IN GENERAL RESERVES? |
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Hi Navin I am not expert but I am sharing what I know
For your first question, GN on ESOP is silent about using Gen Reserve on lapse of Vested options for further issue. Searched on net but for me this question is still unresolved. May be for reissue terms changes, so further issue May not be possible (without shareholders resolution for new terms)
For 2nd question, I have till now not come across such entry. From where did you get it.
GN suggest (Appendix II):
Stock Option Outstanding A/c Dr
To Gen Reserve
I was going through institutes LMS lectures where I learned One more point that above treatment is given when lapse occurred in the year other than the year it was vested.
If lapse occurred in same year in it was vested then instead of Gen Reserve it has to be transferred in P/L
Do correct me if I am wrong - studied this topic recently.
CAclubindia
