The recent time has witnessed a rise in the number of transactions involving share-based payments. Globally, the employers use share-based payments as a part of remuneration package for their employees a practice adopted by many companies in India. Apart from using share-based payments to compensate employees for their services, such payments are also used by employers to incentivise their employees to reward them for their efforts in improving its performance and remain committed to the Company.

Several companies also offer share-based payments to non-employees, including vendors. The concept of share-based payments is broader than employee share options. Indian Accounting Standard 102 covers the sharebased payments to non-employees also. Recognising the need for establishing uniform accounting principles and practices for all types of share-based payments for the companies following Accounting Standards under Companies (Accounting Standards) Rules, 2006, as amended under Section 133 of Companies Act, 2013, it is heartening to note that the Research Committee of the Institute has come out with this ‘Guidance Note on Accounting for Sharebased Payments’.

I would like to congratulate CA. Anuj Goyal, Chairman, Research Committee, CA. Kemisha Soni, Vice-Chairperson, Research Committee, and other members of the Research Committee for their contribution in development of this Guidance Note.

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