Disclosures on fair value, expense and liabilities

Learning objectives

• Identify the disclosures about how fair value was determined, the total expense and the carrying amount of liabilities.L2
• Analyse whether the information provided in a case meets the disclosure objectives or calls for additional information.L3

Normative references

• IFRS 2 §47When the fair value of goods or services received is measured indirectly by reference to the equity instruments granted, the entity discloses at least: for options granted, their weighted average fair value and how it was measured (option pricing model and inputs, including share price, exercise price, expected volatility, option life, expected dividends, risk-free interest rate, early exercise; how expected volatility was determined; other features such as a market condition); for other equity instruments, their number, weighted average fair value and how it was measured; for modified arrangements, an explanation, the incremental fair value and how it was measured.
• IFRS 2 §50Principle: the entity discloses information that enables users to understand the effect of share-based payment transactions on its profit or loss for the period and on its financial position.
• IFRS 2 §51To give effect to para. 50, the entity discloses at least: (a) the total expense for the period arising from goods or services not recognised as assets, separately disclosing the portion arising from equity-settled transactions; (b) for liabilities, their total carrying amount at the end of the period and the total intrinsic value at the end of the period of liabilities for which the counterparty's right to cash had vested.
• IFRS 2 §52If the information required does not satisfy the principles in paras. 44, 46 and 50, the entity discloses the additional information necessary; for example, for a plan classified as equity-settled under para. 33F, an estimate of the amount it expects to transfer to the tax authority in respect of the employee's tax obligation, when necessary to inform users about future cash flows.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• For its cash-settled transactions, what information about the liabilities does the entity disclose?L2
• An entity discloses the total expense for the period on its share-based payments without distinguishing the part relating to equity-settled transactions. What is the error?L3