Share-based payments, like employee share options or performance-based equity, require precise valuation for financial reporting and audit compliance. At Alpha Valuations, we provide expert IFRS 2-aligned valuations that help you recognise, report, and explain the fair value of equity-settled or cash-settled arrangements with confidence.
Whether you’re a CFO, auditor, or founder planning to issue shares or options, our valuations are tailored, defensible, and ready for scrutiny.
Book a share-based payment valuation call nowApproach Used for Share-Based Payment Valuations
1. Identify the Type of Share-Based Payment
Determine whether the award is:
- Equity-settled (e.g. restricted shares, performance shares),
- Cash-settled (e.g. phantom shares), or
- Share-based with a choice of settlement.
4. Consider Vesting Conditions
Service conditions: Only affect the number of awards expected to vest (not fair value).
Performance conditions:
- Market-based: Included in the fair value measurement.
- Non-market-based: Do not affect fair value but impact how many awards are ultimately expensed
2. Determine the Grant Date
Establish the date when both parties agree to the terms of the award and the entity has a present obligation to deliver the shares.
5. Recognise the Expense Over the Vesting Period
Recognise the total expense over the period the employee must provide service:
- Based on the number of awards expected to vest (revised each period for equity-settled awards),
- Adjusted at each reporting date for cash-settled awards.
3. Measure the Fair Value of the Award
-
Equity-settled: Measure fair value at the grant date, using:
- Market approach (share price),
- Adjustments for non-transferability, vesting conditions, etc.
Cash-settled: Measure fair value at each reporting date until settlement, typically using a DCF model or intrinsic value approach.
6. Reassess and
Adjust
- For cash-settled awards, remeasure the liability at fair value at each reporting date until settlement. For equity-settled awards, no remeasurement after grant date, but the number of awards expected to vest may be revised.
- For equity-settled awards, no remeasurement after grant date, but the number of awards expected to vest may be revised.
SARB, LEGAL AND STATUTORY VALUATIONS
This service is aimed at clients who need the opinion of an expert valuer for statutory, regulatory, or legal purposes or for arriving at negotiated settlements of disputes.
Our SARB, Legal and Statutory Valuations experience includes:
- Expert Witness Services
- Intellectual Property Valuations
- Divorce Proceedings
- Exchange Control Approvals
- Companies Act Section 38 Requirements
- Taxation Valuations
To find out more about our these services, get in touch.
Frequently Asked Questions
What is a share-based payment valuation?
A share-based payment valuation determines the fair value of equity instruments granted to employees or third parties in exchange for goods or services. Required under IFRS 2, it ensures the correct accounting of the cost of these instruments in financial statements.
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