Employee share-based compensation: the fair value of stock options and bonus shares is determined by reference to the exercise price, the life of the option, the current price of the underlying shares at the grant date, the expected share price volatility, expected dividends, and the risk-free interest rate over the option’s life. Vesting conditions other than market conditions are not part of the fair value assessment, but are part of the grant assumptions (employee turnover, probability of achieving performance criteria).
The determined amount is recognized in labor expenses on a straight-line basis over the vesting period, with as counterparty:
■ employee benefit liabilities for cash-settled plans, re-measured against profit or loss at each year-end; and
■ equity for equity-settled plans.