ACCA SBR December 2026: Why Your IFRS 2 Share-Based Payment Expense Is Wrong

In SBR, equity-settled share-based payments are measured once, at grant date fair value, and never remeasured. Cash-settled ones are remeasured at every reporting date. Get that split wrong and the whole IFRS 2 answer unravels.

What examiners keep seeing

IFRS 2 turns up in SBR as a short scenario inside a bigger question, often alongside a group or financial instruments issue. Candidates know the standard exists. They lose marks by applying the wrong measurement date, or by dumping the whole cost into year one.

The recurring errors in SBR are consistent. Using the year-end share price for an equity-settled scheme. Ignoring the expected leaver rate. Forgetting that the cost is spread over the vesting period. And treating cash-settled awards as if they were equity, so the liability is never built up.

The second layer is explanation. SBR is not a calculation paper. A correct number with no reasoning about why the credit goes to equity rather than liabilities scores badly on the professional marks. State the principle first, then compute.

Also watch the mixed scenarios: where the employee or the entity can choose settlement, you need to identify who holds the choice before you can classify it. That one sentence is often worth a mark on its own.

Wrong answer vs correct answer

100 managers are each granted 1,000 share options on 1 January 20X1. Fair value at grant is $12, vesting is over three years, and at 31 December 20X1 the entity expects 90% of managers to stay. Year-end fair value is $15.

Wrong: 100 x 1,000 x $15 = $1,500,000 expensed in full in year one.

Correct (equity-settled): 100 x 90% x 1,000 x $12 x 1/3 = $360,000. Debit employee expense, credit equity. The $15 is irrelevant.

Correct (cash-settled, SARs): the same maths but using the $15 year-end fair value gives $450,000, credited to liabilities, and it is remeasured again next year.

What to do

1. Classify before you calculate. Write one line: equity-settled or cash-settled, and why. It earns the mark and stops the wrong measurement date.

2. Run the formula in one line. Number of people x expected remaining x awards x fair value x time elapsed over vesting period. Every IFRS 2 question fits it.

3. Update estimates, not fair value. For equity-settled schemes only the leaver estimate and non-market vesting conditions change in later years. Practise a three-year cumulative workings layout until it is automatic.

The bottom line

IFRS 2 is one of the most predictable parts of SBR and one of the cheapest places to lose marks. Learn the equity versus cash split, show the formula, and give a one-line reason for your classification.

Grant date for equity, year-end for cash. Say it until you stop getting it wrong.