Question 3
An entity grants an equity-settled share option agreement with its employee. For the purposes of IFRS 2, when is the fair value of this award usually measured?
At the entity’s year-end
At the grant date
When the employee exercises the share option
For an equity-settled share option agreement under IFRS 2, the fair value of the award is usually measured at the grant date. This is because IFRS 2 requires that the fair value of the equity instrument be estimated at the time of grant, which is the date when the rights and obligations under the share option agreement are established and agreed upon by both parties. Therefore, the correct answer is:
B. At the grant date
