Document ID: chunk:federal_register_of_legislation:F2022C00493:reg:3:p1
Version: federal_register_of_legislation:F2022C00493
Segment Type: reg
Provision Reference: reg 3 (pt 1/7)
Character Range: 295363–303839

3                                                                                                                                                                                                                                                                                                                                                                                                      Liability component:
                                                                                                                                                                                                                                                                                                                                                                                                       (1,000 × CU60) – CU36,666                   23,334                              23,334
                                                                                                                                                                                                                                                                                                                                                                                                       Equity component:
                                                                                                                                                                                                                                                                                                                                                                                                       (CU7,600 × 1/3)                             2,534              2,534
End Year 3                                                                                                                                                                                                                                                                                                                                                                                             Scenario 1: cash of CU60,000 paid
Scenario 1 totals                                                                                                                                                                                                                                                                                                                                                                                                                         67,600           7,600             0
Scenario 2: 1,200 shares issued                                                                                                                                                                                                                                                                                                                                                                                                                            60,000            (60,000)
Scenario 2 totals                                                                                                                                                                                                                                                                                                                                                                                                                         67,600           67,600            0

Share-based payment transactions among group entities
IG22A Paragraphs 43A and 43B of AASB 2 specify the accounting requirements for share-based payment transactions among group entities in the separate or individual financial statements of the entity receiving the goods or services. Example 14 illustrates the journal entries in the separate or individual financial statements for a group transaction in which a parent grants rights to its equity instruments to the employees of its subsidiary.

IG Example 14
Share-based payment transactions in which a parent grants rights to its equity instruments to the employees of its subsidiary
Background
A parent grants 200 share options to each of 100 employees of its subsidiary, conditional upon the completion of two years' service with the subsidiary. The fair value of the share options on grant date is CU30 each. At grant date, the subsidiary estimates that 80 per cent of the employees will complete the two-year service period. This estimate does not change during the vesting period. At the end of the vesting period, 81 employees complete the required two years of service. The parent does not require the subsidiary to pay for the shares needed to settle the grant of share options.
Application of requirements
As required by paragraph B53 of the Standard, over the two-year vesting period, the subsidiary measures the services received from the employees in accordance with the requirements applicable to equity-settled share-based payment transactions. Thus, the subsidiary measures the services received from the employees on the basis of the fair value of the share options at grant date. An increase in equity is recognised as a contribution from the parent in the separate or individual financial statements of the subsidiary.
The journal entries recorded by the subsidiary for each of the two years are as follows:
Year 1
Dr Remuneration expense
(200 × 100 × CU30 × 0.8/2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       CU240,000
Cr Equity (Contribution from the parent)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    CU240,000
Year 2
Dr Remuneration expense
(200 × 100 × CU30 × 0.81 – 240,000)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              CU246,000
Cr Equity (Contribution from the parent)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    CU246,000

Illustrative disclosures
IG23 The following example illustrates the disclosure requirements in paragraphs 44–52 of the Standard.[10]
Extract from the Notes to the Financial Statements of Company Z for the year ended 31 December 20X5.
Share-based Payment
During the period ended 31 December 20X5, the Company had four share-based payment arrangements, which are described below.

Type of arrangement  Senior management share option plan                                              General employee share option plan