2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.25 Share-based payments – Employee options
The Group operates an equity-settled, share-based compensation plan under which the entity receives services from
employees as consideration for equity instruments (options) of the Group. The fair value of the options granted in
exchange for the services of the employees are recognised as employee benefit expense with a corresponding
increase to share option reserve within equity. The total amount to be expensed is determined by reference to the
fair value of the options granted:
– including any market performance conditions (for example, an entity’s share price);
– excluding the impact of any service and non-market performance vesting conditions (for example, profitability,
sales growth targets and remaining an employee of the entity over a specified time period); and
– including the impact of any non-vesting conditions (for example, the requirement for employees to save or holding
of shares for a specific period of time).
Non-market vesting conditions and service conditions are included in assumptions about the number of options that
are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of the reporting period, the Group revises its estimates of the number of
options that are expected to vest based on the non-market vesting conditions and service conditions. It recognises
the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to share
option reserve in equity.
In circumstances where employees provide services in advance of the grant date, the grant date fair value is
estimated for the purposes of recognising the expense during the period between service commencement period and
grant date.
When the options are exercised, the Company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium when the options are
exercised. When options are not exercised and lapse, the share option reserve is transferred to retained earnings.
In its separate financial statements of the Company, the grant by the Company of options over its equity instruments
to the employees of subsidiary in the Group is treated as a capital contribution to the subsidiary. The fair value of
options granted to employees of the subsidiary in exchange for the services of the employees to the subsidiary are
recognised as investment in subsidiary, with a corresponding credit to equity of the Company.
255
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
