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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II THE EQUITY-SETTLED SHARE-BASED PAYMENTS CHAPTER III THE CASH-SETTLED SHARE-BASED PAYMENTS CHAPTER IV DISCLOSURE CHAPTER I GENERAL PROVISIONS Article 1. For the purpose of regulating the recognition and measurement of share-based payments, and the disclosure of relevant information, these Standards are formulated in accordance with the Accounting Standards for Enterprises-Basic Standards. Article 2. The term "share-based payment" refers to a transaction in which an enterprise grants equity instruments or incurs equity-instrument-based liabilities in return for employee services and other parties. The share-based payments shall be classified into 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 acquires services as a consideration for shares or other equity instruments of the enterprise. The term "cashed-settled share-based payment" refers to a transaction in which the enterprise calculates and determines the cash payment or any other asset obligation on the basis of shares or other equity instruments in return for services. The term "equity instrument" as mentioned in these Standards refers to the enterprise's own equity instruments. Article 3. The following items shall be governed by other accounting standards: (1) A transaction in which an enterprise acquires the net assets of another enterprise in a business combination shall be governed by Accounting Standards for Enterprises No. 20-Business Combination; and (2) A transaction in which equity instruments are granted as a consideration for other financial instruments shall be governed by the Accounting Standards for Enterprises No. 22-Recognition and Measurement of Financial Instruments. 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 granted to the employees. The fair value of the equity instruments shall be determined according to Accounting Standards for Enterprises No. 22-Recognition and Measurement of Financial Instruments. Article 5. For an equity-settled share-based payment in return for services of employees, if the right may be exercised immediately after the grant, the fair value of the equity instruments shall, on the grant day, be recorded in the relevant cost or expense and the capital surplus shall be increased correspondingly. The "grant date" refers to the date on which the share-based payment agreement is approved. Article 6. For a equity-settled share-based payment in return for employee services, if the right cannot be exercised until the vesting period ends or until the prescribed performance conditions are met, then on each balance sheet date within the vesting period, the services acquired in the current period shall, on the basis of the best estimate of the number of vested equity instruments, be recorded in the relevant costs or expenses and the capital surplus at the fair value of the equities instruments on the grant date. If, on the balance sheet date, the subsequent information indicates that the number of vested equity instruments differs from previous estimate, an adjustment shall be made and on the vesting date, the estimate shall be revised to equal the number of the actually vested equity instruments. The "vesting period" refers to the period during which the specified vesting conditions are to be satisfied. For a share-based payment with a specified service period as the vesting condition, the vesting period shall be from the grant date to the vesting date. For a share-based payment with specified performances as the vesting condition, the length of the vesting period shall be estimated according to the most likely performance outcome. The "vesting date" refers to the date on which the vesting conditions are satisfied and the employees and other parties have the right to obtain the equity instruments or cash from an enterprise. Article 7. An enterprise shall, on vesting date, make no adjustment to the relevant costs or expenses as well as the total amount of the owner's equities which have been recognized. Article 8. An equity-settled share-based payment in return for the service of any other party shall be treated according to the following circumstances, respectively: (1) If the fair value of the service of any other party can be reliably measured, the fair value of the service on the acquisition date and shall be recorded in the relevant costs or expenses, and the owner's equities shall be increased correspondingly; (2) If the fair value of the service of any other party cannot be reliably measured, but the fair value of the equity instruments can be reliably measured, the fair value of the service on the acquisition date shall be recorded in the relevant costs or expenses, and the owner's equities shall be increased correspondingly. Article 9. On the exercise date, an enterprise shall, on the basis of the number of the equity instruments of which the right is actually exercised, calculate and determine the amount of the paid-in capital or capital stock to be transferred in, and transfer it in the paid-in capital or stock capital. The "exercise date" refers to the date on which the employees and other parties exercise the right, or acquire cash or equity instruments. CHAPTER III THE CASH-SETTLED SHARE-BASED PAYMENTS Article 10. A cash-settled share-based payment shall be measured according to the liability incurred by an enterprise which is calculated and determined on the basis of the shares or other equity instruments. Article 11. For a cash-settled share-based payment instruments, if the right may be exercised immediately after the grant, the fair value of the liability incurred by the enterprise shall, on the grant day, be recorded in the relevant costs or expenses, and the liabilities shall be increased correspondingly. Article 12. For a cash-settled share-based payment, if the right may not be exercised until the vesting period ends or until the specified performance conditions are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, on the basis of the best estimate of the information about the exercisable right, be recorded in the relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the enterprise. If, on the balance sheet date, the subsequent information indicates that fair value of the current liability incurred by the enterprise differs from previous estimates, an adjustment shall be made and on the vesting date, and the estimate shall be revised to equal the actually exercisable right. Article 13. An enterprise shall, on each balance sheet date and on each settlement date prior to the settlement of the relevant liabilities, re-measure the fair values of the liabilities and record the changes in the current profits and losses. CHAPTER IV DISCLOSURE Article 14. An enterprise shall, in the notes, disclose the following information relevant to the cash-settled share-based payments: (1) The total amounts of the equity instruments which are granted, exercised and invalidated in the current period; (2) The range of the exercise prices for the share options or other equity instruments at the end of period, and the remainder of the contractual period; (3) The weighted average prices of the share options or other equity instruments exercised in the current period which are calculated on the basis of the exercise date prices; and (4) The measures for the determination of the fair value of the equity instruments. The enterprise may disclose the homogeneous share-based payment information 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 operating outcomes, which shall at least include the following information: (1) The total amount of the expenses due to equity-settled share-based payments, which is recognized in the current period; (2) The total amount of the expenses due to cash-settled share-based payments, which is recognized in the current period; and (3) The current total amount of the employee services and the current total amount of other services of other parties related to the share-based payments. |
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