Shares

Q51 Raven

• 1 May 20x7 - Raven 200k £1 ordinary shares

• 1 Nov 20x7 - Ester suppliers agreed that each month supply goods at FV of £2k in exchange for 50 new £1 shares in Raven - this agreement is for 2 years until 20x9

• 30 Apr 20x8 - 300 £1 shares issued to Ester - only journal

• DR cost of sales £12k CR trade payables £12k

Issue ordinary shares is an equity settled share based payment

if goods or services are provided by a 3rd party, you measure the transaction at the fair value of the goods or services received, not the shares issued, if you can measure it reliably.

Nov 20x7 to 30 Apr 20x8 is 6mths so £2k*6=£12k

• shares issued to 3rd party the transaction is recognised at FV of goods provided - it should had been DR cost of sales £12k CR equity £12k

• no cash is owed and they are making payment in equity.