Explanation:

For accounting purposes, employee share-based payment plans are classified into the following categories:

(a) Equity-settled: Under these plans, the employees receive shares.

(b) Cash-settled: Under these plans, the employees receive cash based on the price (or value) of the enterprise’s shares.

(c) Employee share-based payment plans with cash alternatives: Under these plans, either the enterprise or the employee has a choice of whether the enterprise settles the payment in cash or by issue of shares.