Scope and out of scope Share Based Transaction as Per Ind AS 102


  1. An entity shall apply this Standard in accounting for all share-based payment transactions, whether or not the entity can identify specifically some or all of the goods or services received, including:

(i) equity-settled share-based payment transactions,

(ii) cash-settled share-based payment transactions, and

(iii) transactions in which the entity receives or acquires goods or services and the terms of the arrangement provide either the entity or the supplier of those goods or services with a choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments

  1. A Share based payment transaction may be settled by another group entity (or shareholder of any group entity) on the behalf of the entity receiving or acquiring the goods and services.
  • receives goods or services when another entity in the same group (or a shareholder of any group entity) has the obligation to settle the share-based payment transaction, or
  • has an obligation to settle a share-based payment transaction when another entity in the same group receives the goods or services

 unless the transaction is clearly for a purpose other than payment for goods or services supplied to the entity receiving them.

  1. Employees receiving Share-based payment as a service provider will covered under this standard


  • Here Goods includes inventories, consumables, property, plant and equipment, intangible assets and other non-financial assets.
  • Equity instruments granted to employees of the acquiree in their capacity as employees (eg in return for continued service) are within the scope of this Standard.
  • Cancellation, replacement or other modification of share-based payment arrangements because of a business combination or other equity restructuring shall be accounted for in accordance with this Standard.
  • Ind AS 103 provides guidance on determining whether equity instruments issued in a business combination are part of the consideration transferred in exchange for control of the acquiree (and therefore within the scope of Ind AS 103) or are in return for continued service to be recognised in the post-combination period (and therefore within the scope of this Standard)

Out of scope

  1. Transaction with an employee (other party) in his/her capacity as a holder of an equity instrument of the entity is not covered under share-based transaction Ind AS 102. For Example Right issue (if an employee or other party receives shares less than fair value will not be covered in this standard.)
  2. An entity shall not apply this standard to transactions in which an entity acquires goods as a part of net assets acquired under business combination as per Ind AS 103 or contribution for Joint ventures as per Ind AS 111 ‘Joint Arrangements’.


  1. Standard does not apply to share-based payment transactions in which the entity receives or acquires goods or services under a contract within the scope of paragraphs 8–10 of Ind AS 32, Financial Instruments: Presentation, or paragraphs 2.4–2.7 of Ind AS 109, Financial Instruments.


Contracts for purchase and sale of goods/ services which are entered for settling in net amounts/ or keep it for speculation purposes will be covered under Ind AS 109- Financial Instruments and hence will not be covered under Ind AS 102.

Priyansh Minocha

Priyansh Minocha is C.E.O and Director at Amonest India Private Limited and Founder at Casolutionsglobal

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