Ind AS 102
Active
Share-based Payment
Prescribes the accounting for share-based payment transactions, near-identical to IFRS 2 but interacting with Indian regulatory bodies (SEBI for listed companies' ESOP schemes) and Indian tax treatment of perquisites.
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Conceptual Framework Linkage
The same expense-recognition principle as IFRS 2
Ind AS 102 applies the IDENTICAL Conceptual Framework logic as IFRS 2 – receiving employee SERVICE in exchange for share options is genuinely no different from paying cash wages, and must be recognised as an EXPENSE as those services are consumed. India's convergence approach means this fundamental principle is carried forward WITHOUT modification.
HOW IND AS 102 MAPS TO THE FRAMEWORK
Expense recognition – services received in exchange for equity instruments are expensed as consumed, matching employee service to the vesting period – IDENTICAL to IFRS 2 Faithful representation – omitting ESOP expense would understate an Indian company's true remuneration cost, just as under IFRS 2 globally Interaction with Indian securities regulation – for LISTED Indian companies, Ind AS 102's accounting sits ALONGSIDE (not instead of) SEBI's own regulatory framework governing ESOP scheme APPROVAL and administration (Section 5) – a genuinely India-specific regulatory layer that IFRS 2 has no direct equivalent for
Ind AS 102 is one of the MOST closely converged Ind AS standards relative to its IFRS counterpart – the accounting MECHANICS are essentially identical; the main practical differences relate to INDIAN REGULATORY interaction (SEBI) and TAX treatment context, not the core accounting principles themselves.
Measurement principles – identical to IFRS 2
ClassificationMeasurement basis
Equity-settledFair value AT GRANT DATE, fixed – IDENTICAL to IFRS 2
Cash-settledFair value REMEASURED at each reporting date – IDENTICAL to IFRS 2
There is NO substantive measurement difference between Ind AS 102 and IFRS 2 – this is genuinely a "near-verbatim" converged standard.
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Scope & Applicability
What Ind AS 102 covers
Ind AS 102 applies to ALL share-based payment transactions – equity-settled, cash-settled, and choice-of-settlement arrangements – with EXCLUSIONS mirroring IFRS 2's own (business combination consideration under Ind AS 103, certain IAS 41/Ind AS 2 contribution scenarios).
In the Indian context, Employee Stock Option Plans (ESOPs), Employee Stock Purchase Plans (ESPPs), and Stock Appreciation Rights (SARs) are the most common instruments falling within Ind AS 102's scope, particularly for listed and startup companies.
Key definitions you must know
Grant date
The date the entity and counterparty agree to a share-based payment arrangement – IDENTICAL definition to IFRS 2.
SEBI (SBEB) Regulations
The Securities and Exchange Board of India's Share Based Employee Benefits Regulations, governing the APPROVAL and administration of ESOP schemes for listed Indian companies – a regulatory layer alongside, not replacing, Ind AS 102's accounting requirements.
Perquisite (Indian tax context)
The Indian Income Tax Act term for the taxable benefit an employee receives on exercising ESOPs – a tax concept operating ALONGSIDE, and independently of, Ind AS 102's accounting expense recognition.
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Equity-Settled – Recognition & Grant Date Fair Value (with worked example)
Identical mechanics to IFRS 2
Total expense = Number of instruments expected to vest × Grant date fair value per instrument, recognised STRAIGHT-LINE over the vesting period, credited to equity
Example 1: An Indian tech startup's ESOP grant
An Indian startup grants 50,000 options to 20 employees on 1 April 2023, conditional on 3 years' continued service, with a grant date fair value of ₹80 per option (using the Black-Scholes model, since the company is unlisted and has no market price). At the end of Year 1, the entity estimates 90% of employees will remain employed through vesting.
Year 1 expense = 50,000 × 90% × ₹80 × (1/3) = ₹12,00,000, recognised as an employee benefit expense with a corresponding credit to the Employee Stock Options Outstanding reserve within equity – mechanically IDENTICAL to how an equivalent grant would be accounted for under IFRS 2.
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Vesting Conditions – Market vs Non-Market
Identical treatment to IFRS 2
Service and non-market performance conditions affect the NUMBER of instruments expected to vest (re-estimated each period); market conditions are built into GRANT DATE FAIR VALUE and NEVER reversed even if the market condition is not achieved – this distinction, and its accounting consequences, are IDENTICAL between Ind AS 102 and IFRS 2, with no substantive divergence.
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SEBI (SBEB) Regulations Interaction (with worked example)
A genuinely India-specific regulatory layer
For LISTED Indian companies, ESOP schemes must comply with SEBI's Share Based Employee Benefits Regulations – governing shareholder APPROVAL requirements, minimum vesting periods, disclosure in the Directors' Report, and administration through an ESOP trust in certain structures. This regulatory framework operates ALONGSIDE Ind AS 102's accounting requirements – SEBI governs the SCHEME's legal/governance validity, while Ind AS 102 governs its ACCOUNTING TREATMENT once the scheme exists.
Example 2: SEBI vs Ind AS 102 – two distinct requirements
A listed Indian company's ESOP scheme requires shareholder approval via special resolution under SEBI SBEB Regulations before options can be granted. Once approved and granted, options carry a grant date fair value of ₹120 each.
SEBI's regulations govern WHETHER and HOW the scheme could be legally implemented (shareholder approval process) – a GOVERNANCE requirement. Ind AS 102 THEN governs the ACCOUNTING once the scheme is validly implemented (fair value measurement, expense recognition over the vesting period) – the two frameworks operate on ENTIRELY different dimensions of the same underlying transaction, with NO direct IFRS 2 equivalent for the SEBI layer specifically.
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Cash-Settled Share-based Payment
Identical mechanics to IFRS 2
For cash-settled arrangements (e.g. Stock Appreciation Rights, common in Indian unlisted/startup contexts where equity dilution is less desirable), the liability is measured at fair value and REMEASURED each period until settlement, with changes recognised in profit or loss – mechanically IDENTICAL to IFRS 2's own cash-settled treatment.
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Modifications, Cancellations & Forfeitures
Identical treatment to IFRS 2
Modifications increasing fair value are recognised as incremental expense; decreases are ignored. Cancellation accelerates remaining expense immediately; forfeiture (for failing a service/non-market condition) reverses cumulative expense already recognised – NO substantive difference from IFRS 2's own treatment.
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Group Share-based Payment Arrangements
Identical treatment to IFRS 2 – relevant for Indian subsidiaries of foreign multinationals
Where a FOREIGN parent grants its own equity instruments to employees of its INDIAN subsidiary, the Indian subsidiary recognises the services received as an expense (with a corresponding capital contribution credit), while the parent recognises the increase in its own equity – a scenario COMMONLY arising for Indian subsidiaries of US/European multinational groups, applying the SAME mechanics as IFRS 2.
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Disclosure Requirements
Required disclosures – largely identical to IFRS 2, plus Companies Act cross-references
Description of each arrangement, vesting requirements, maximum term, method of settlement Number/weighted average exercise price of options – movements during the period Option pricing model inputs used to determine fair value Total expense recognised in the period Indian listed companies ALSO cross-reference SEBI SBEB Regulations disclosure requirements in the Directors' Report, a requirement operating alongside (not replacing) Ind AS 102's own note disclosures
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Critical Judgments & Estimates
Where management judgement matters most
SIGNIFICANT JUDGEMENTS
Classifying market vs non-market conditions – identical to IFRS 2 Determining whether an Indian subsidiary's grant from a foreign parent creates a capital contribution
SIGNIFICANT ESTIMATES
Fair value using option pricing models, particularly for UNLISTED Indian companies (a common scenario for startups) where no market price exists, making volatility estimation genuinely challenging Estimated forfeiture rates
For UNLISTED Indian companies (a very common scenario given India's large startup ecosystem), estimating VOLATILITY for option pricing models is particularly challenging given the absence of an observable market price – often requiring comparable listed company data as a proxy.
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Ind AS 102 vs IFRS 2 – Full Comparison
Comprehensive comparison table
FeatureIFRS 2Ind AS 102
Core recognition/measurement principlesGrant date fair value (equity-settled); remeasured fair value (cash-settled)IDENTICAL – no substantive divergence
Market vs non-market conditionsBuilt into fair value vs affecting vesting numberIDENTICAL
Regulatory approval layer for listed companiesNo direct global equivalent – governed by local securities regulators where applicableSEBI's Share Based Employee Benefits Regulations govern scheme approval/administration for LISTED Indian companies – a genuinely India-specific regulatory overlay
Tax treatment interactionVaries by jurisdiction, generally separate from accountingIndian "perquisite" taxation under the Income Tax Act operates INDEPENDENTLY of Ind AS 102's accounting expense – a distinct but parallel Indian regulatory dimension
Terminology"Share-based payment," "equity instruments"Same terminology, though Indian practice commonly uses "ESOP" (Employee Stock Option Plan) as the practical shorthand
Ind AS 102 is genuinely one of the MOST closely converged Ind AS standards – the accounting SUBSTANCE is essentially identical to IFRS 2; the practical Indian-specific considerations relate almost entirely to REGULATORY (SEBI) and TAX (Income Tax Act) layers operating ALONGSIDE the accounting standard, not to the accounting itself.
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Statement Mapping
Comprehensive event-to-statement mapping table
Event / transactionStatement(s) affectedNotes
Equity-settled expense recognised each periodP&L EquityCredited to ESOP Reserve within equity
Forfeiture (service/non-market condition not met)P&L EquityCumulative expense reversed
Exercise of vested optionsEquityESOP Reserve transferred to share capital/securities premium
Cash-settled (SAR) expense recognised each periodP&L Balance SheetLiability remeasured to fair value each period
SEBI SBEB scheme disclosuresDirectors' ReportAlongside, not replacing, Ind AS 102 note disclosures
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Related Standards
Cross-reference map
StandardConnection
IFRS 2The GLOBAL counterpart standard, near-identical in substance
Ind AS 33ESOPs are potential ordinary shares, tested for dilution in diluted EPS
Ind AS 24ESOP grants to KMP require related party disclosure
Companies Act, 2013 / SEBI SBEB RegulationsGoverns the legal/governance validity and approval process for ESOP schemes at listed and certain unlisted Indian companies
Quick-reference glossary
ESOP
Employee Stock Option Plan – the common Indian practical term for equity-settled share-based payment arrangements.
ESOP Trust
A trust structure some Indian listed companies use to administer their ESOP schemes, subject to SEBI SBEB Regulations, holding shares on behalf of the scheme.
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Glossary
Grant date
The date the entity and counterparty agree to a share-based payment arrangement – identical definition to IFRS 2.
SEBI (SBEB) Regulations
The Securities and Exchange Board of India's Share Based Employee Benefits Regulations, governing the approval and administration of ESOP schemes for listed Indian companies – a regulatory layer alongside, not replacing, Ind AS 102's accounting requirements.
Perquisite (Indian tax context)
The Indian Income Tax Act term for the taxable benefit an employee receives on exercising ESOPs – a tax concept operating alongside, and independently of, Ind AS 102's accounting expense recognition.
ESOP
Employee Stock Option Plan – the common Indian practical term for equity-settled share-based payment arrangements.
ESOP Trust
A trust structure some Indian listed companies use to administer their ESOP schemes, subject to SEBI SBEB Regulations, holding shares on behalf of the scheme.
Financial statement key
BS Balance sheet
IS Income statement
SE Statement of changes in equity
OCI Other comprehensive income
SCF Statement of cash flows