Share-based Payment requires an entity to recognize share-based payment transactions (such as granted shares, share options, or share appreciation rights) in its financial statements, including transactions with employees or other parties to be settled in cash, other assets, or equity instruments of the entity. Specific requirements are included for equity-settled and cash-settled share-based payment transactions, as well as those where the entity or supplier has a choice of cash or equity instruments.
Disadvantages of share-based payments
Accounting can be complex as there are number of considerations to cover off under share-based payments
Valuations of certain SBP’s can give a fair value that is higher than expected. Valuation s due to complexity will need to be valued
Is effectively diluting current ownership as you are giving away rights to ownership.
Significant consideration will need to be included in agreements to avoid any unintended consequences.