Singapore Airlines 2016 Annual Report Download - page 133

2 Summary of Significant Accounting Policies (continued)
(ac) Employee benefits
(i) Equity compensation plans
Employees of the Group receive remuneration in the form of share options and share awards as consideration for services rendered.
The Company has in place the Singapore Airlines Limited Employee Share Option Plan, and its subsidiaries the SIA Engineering
Company Limited Employee Share Option Plan and the Pre-IPO Tiger Aviation Share Options Scheme, for the granting of share
options to senior executives and other employees. The exercise price approximates the market value of the shares at the date of grant.
The Company has also implemented the Singapore Airlines Limited Restricted Share Plan and Performance Share Plan, and its
subsidiaries the SIA Engineering Company Limited Restricted Share Plan and Performance Share Plan and the Tiger Airways Group
Restricted Share Plan, Performance Share Plan and CEO Restricted Share Grant for the awarding of fully paid ordinary shares to
senior executives and key Senior Management, when and aer pre-determined performance or service conditions are accomplished.
Details of the plans are set out in Note 5 to the financial statements.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options or awards at
the date on which the share options or awards are granted. In valuing the share options and share awards, no account is taken of
any performance conditions, other than conditions linked to the price of the shares of the Company and non-vesting performance
conditions.
This cost is recognised in the profit and loss account as share-based compensation expense, with a corresponding increase in the
share-based compensation reserve, over the vesting period in which the service conditions are fulfilled, ending on the date on which
the relevant employees become fully entitled to the award (“the vesting date”). Non-market vesting performance conditions are
included in the estimation of the number of shares under option that are expected to become exercisable on the vesting date. At
the end of each reporting period, the Group revises its estimates of the number of shares under option that are expected to become
exercisable on the vesting date and recognises the impact of the revision of the estimates in the profit and loss account, with a
corresponding adjustment to the share-based compensation reserve, over the remaining vesting period.
No expense is recognised for options or awards that do not ultimately vest, except for options or awards where vesting is conditional
upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that
all other performance and/or service conditions are satisfied.
The share-based compensation reserve is transferred to general reserve upon cancellation or expiry of the vested options or awards.
When the options are exercised or awards are released, the share-based compensation reserve is transferred to share capital if
new shares are issued.
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