CERTYNEX IFRS ACADEMY

For cash-settled share appreciation rights with a three-year service condition, a controller allows for the expected leavers by reducing the unit fair value of each right. What is the error?

Market conditions should, conversely, have been dealt with by adjusting the number of rights expected to vest.

The liability should have been measured at the grant date and no longer remeasured, as for an equity-settled plan.

The liability should have ignored the service condition, as it is not, in the controller's view, a vesting condition of the rights.

The service condition applies to the number of rights expected, not to the unit fair value of the liability.