Accounting Issues In Share-based Payment

The IFRS Share-based Payment Standard has long been criticized for its complexity. This work tends to explain two of its main complications, the grant date fair value and three vesting and non-vesting conditions, and to point out inconsequence issues in Chinese standards. When Chinese Sare-based Payment Standard was issued in 2006, there was rare experience in practice. Now after 10 years of practicing share-based payment, the standard need to fit the new economic condition and financial innovation, and the motivation of using share-based payment need to be concerned.This work analyses the logic under the current standard and the practice of share-based payment in China. And this work raised problems in the current practice. Aiming to reconsider the standard, this work conclude a better way to recognize, measure and disclose share-based payment to raise the reliability and relevance of the financial report in China. Share compensation is the main type of share-based payment, so this work discuss practice of the standard from the angle of share compensation.The author believes that recognition share-based payment as expense using the grant date fair value is reasonable. If we change the valuation method there will be problem. And we should use the classification between debt and equity to decide the debt entry. About deciding the vesting and non-vesting conditions, the author introduces the logic of forfeitablity in the American standard.The author also believes that to protect the shareholders it is important for us to disclose more information of share-based compensation. It includes the entire timeline and reports on performance and risks consequence of share-based compensations. The author not only give the reason and importance of reporting but also discuss different possible ways of valuing payment, performance and risks. The author thinks that the consulting service should not be encouraged in China based on the America experience. This work can not avoid discussing such conflicts in accounting as equity or debt, fair value, goal of financial management, valuation of performance and risks, and rule-based or principle-based standards. The author analyses these issues use her own knowledge.