Accounting Treatment when you have Hybrid RSU or ESOPs

Practical Scenario :

On 1 January 2026, Groww Ltd. granted 30 employees 500 rights each. If still employed on 31 December 2027, each right entitles the holder to either:

• Two shares of Groww Ltd., or
• Cash equal to the value of one Groww Ltd. share.

If the holder opts for the shares, then the shares must be held for three years.

At the grant date, the fair value of a Groww Ltd. share is Rs 10. The post-vesting transfer restrictions mean that the fair value of the share alternative at the grant date is Rs 8 per share.

In the year ended 31 December 2026, one employee left and two more were expected to leave prior to the vesting date.

In the year ended 31 December 2027, four employees left.

The following information is available:

Answer :