The Ministry of Finance Accounting Standards for Enterprises No. 11 – Share-based Payments Cai Kuai [2006] No.3 February 15, 2006 Chapter I General Provisions Article 1 These Standards are formulated in accordance with the Accounting Standards for Enterprises – Basic Standards for the purpose of regulating Article 2 The term “share-based payment” refers to a transaction in which an enterprise grants equity instruments or undertakes equity-instrument-based The share-based payments shall consist of equity-settled share-based payments and cash-settled share-based payments. The term “equity-settled share-based payment” refers to a transaction in which an enterprise grants shares or other equity instruments The term “cash-settled share-based payment” refers to a transaction of payment of cash or any other asset obligation calculated and The term “equity instrument” as mentioned in these Standards refers to the equity instruments of the enterprise’s own. Article 3 The following items shall be governed by other accounting standards: (1) The Accounting Standards for Enterprises No. 20 – Business Combination shall apply to a transaction in which an enterprise issue the (2) The Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial Instruments, shall apply to a transaction Chapter II The Equity-settled Share-based Payments Article 4 The equity-settled share-based payment in return for employee services shall be measured at the fair value of the equity instruments The fair value of the equity instruments shall be confirmed in accordance with Accounting Standards for Enterprises No. 22 – Recognition Article 5 As to an equity-settled share-based payment in return for services of employees, if the right may be exercised immediately after the The “grant date” refers to the date on which the share-based payment agreement is approved. Article 6 As to a equity-settled share-based payment in return for employee services, if the right cannot be exercised until the vesting period If, on the balance sheet date, the subsequent information indicates that the number of vested equity instruments is different from The ” vesting period” refers to the period during which the specified vesting conditions are to be satisfied. As to a share-based payment with a specified service period as the vesting condition, the vesting period shall be from the grant date The “vesting date” refers to the date on which the vesting conditions are met and the employees and other parties have the right to Article 7 An enterprise shall, after the vesting date, make no adjustment to the relevant costs or expenses as well as the total amount of the Article 8 An equity-settled share-based payment in return for the service of any other party shall be conducted in accordance with the following (1) If the fair value of the service of any other party can be measured in a reliable way, the fair value of the service on the acquisition (2) If the fair value of the service of any other party can not be measured in a reliable way, but the fair value of the equity instruments Article 9 On the vesting date, an enterprise shall, based on the number of the equity instruments of which the right is actually exercised, The “vesting date” refers to the date on which the employees and other parties exercise the right, acquire cash or equity instruments. Chapter III The Cash-settled Share-based Payments Article 10 A cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated and confirmed based Article 11 As to a cash-settled share-based payment instruments, if the right may be exercised immediately after the grant, the fair value of Article 12 As to a cash-settled share-based payment, if the right may not be exercised until the vesting period comes to an end or until the If, on the balance sheet date, the subsequent information indicates that fair value of the current liability undertaken by the enterprise Article 13 An enterprise shall, on each balance sheet date and on each account date prior to the settlement of the relevant liabilities, re-measure Chapter IV Disclosure Article 14 An enterprise shall, in the notes, disclose the information related to the cash-settled share-based payments as follows: (1) The total amounts of the equity instruments that are granted, exercised and invalidated in the current period; (2) The range of the vesting prices for the share options or other equity instruments issued outward at the end of period, and the remainder (3) The weighted average prices of the share options or other equity instruments exercised in the current period which are calculated (4) The measures for the confirmation of the fair value of the equity instruments. The enterprise may disclose the information of homogeneous share-based payments on a consolidated basis. Article 15 An enterprise shall, in its notes, disclose the effects of the share-based payment transactions on the current financial status and (1) The total amount of the expenses as result of equity-settled share-based payments, which is recognized in the current period; (2) The total amount of the expenses as a result of cash-settled share-based payments, which is recognized in the current period; and (3) The total amount of the employee services and other party services as a result of the share-based payments in the current period |
The Ministry of Finance
2006-02-15