Admission Document - BrainJuicer

uling at the date of the transaction. Exchange differences are taken into account in arriving at the operating
profit.
For subsidiaries and branches the assets and liabilities are translated into sterling at closing exchange rates
and the profit and loss account is translated at the average rate for the period.
Financial instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets
of the entity after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share capital) are equivalent to a
similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are
presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are
included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of
interest on the outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the definition of a financial
liability then this is classed as an equity instrument. Dividends and distributions relating to equity
instruments are debited direct to equity.
Compound instruments
Compound instruments comprise both a liability and an equity component. At date of issue, the fair value of
the liability component is estimated using the prevailing market interest rate for a similar debt instrument.
The liability component is accounted for as a financial liability. The residual is the difference between the
net proceeds of issue and the liability component (at time of issue). The residual is the equity component,
which is accounted for as an equity instrument.
The interest expense on the liability component is calculated by applying the prevailing market interest rate
of a similar debt instrument at the date of issue of the instrument to the liability component. The difference
between this amount and any repayments is added to the carrying amount of the liability in the balance sheet.
Share Options
The BrainJuicer UK Group issues equity-settled share-based payments to certain employees (including
directors). Equity-settled share-based payments are measured at fair value at the date of grant. The fair value
determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis
over the vesting period, together with a corresponding increase in equity, based upon the BrainJuicer UK
Group’s estimate of the shares that will eventually vest.
Fair value is measured using the Black Scholes pricing model. The expected life used in the model has been
adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations.
Where the terms of an equity-settled transaction are modified, as a minimum an expense is recognised as if
the terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled transaction is cancelled, it is treated as if it had vested on the date of the cancellation,
and any expense not yet recognised for the transaction is recognised immediately. However, if a new
transaction is substituted for the cancelled transaction, and designated as a replacement transaction on the
date that it is granted, the cancelled and new transactions are treated as if they were a modification of the
original transaction, as described in the previous paragraph.
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