The requirement of 1% share price growth is a market performance condition, and whether the market conditions are met or not will not affect the enterprise's estimation of the estimated feasible rights. For share-based payment with market conditions as the feasible right condition, as long as employees meet the service term conditions and all other non-market conditions (such as profit growth rate), enterprises should confirm the services they have obtained.

there are no other non-market conditions except the requirement of 1% share price growth (market performance condition) and three-year service period, so it is enough to meet the service period condition.

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In equity-settled share-based payment, the total share-based payment fee to be confirmed = the number of equity instruments granted × the fair value of these equity instruments on the grant date.

Among them, the market conditions in the conditions of unfeasible right and feasible right determine the fair value of equity instruments; The service term and non-market conditions in the feasible right conditions determine the number of equity instruments granted (confirming the services obtained).

in addition, according to the financial instruments standards, subsequent changes in the fair value of equity instruments are not recognized, so once equity instruments are granted, they will be measured according to the fair value on the grant date, and subsequent changes in the fair value will not affect the total amount of confirmed share-based payment fees.

According to the above basic principles, we can draw the following conclusions:

1. The service term conditions and non-market conditions are met-the cost is confirmed

When the incentive object meets the service term conditions and non-market conditions in the feasible rights conditions, it is awarded a set number of equity instruments. Even if the fair value of these equity instruments decreases or even becomes zero due to the failure to meet the market conditions or the vesting rights conditions, it will no longer affect the measurement of the total share-based payment expenses, so the previously confirmed share-based payment-related costs and expenses cannot be reversed, and these expenses will continue to be confirmed in the original waiting period.

2. Service term conditions and non-market conditions cannot be met-costs and expenses can be offset

If the exercise cannot be performed due to failure to meet service term conditions or non-market conditions, the number of equity instruments finally granted is zero, and accordingly the total amount of share-based payment expenses to be confirmed is zero, and the previously confirmed share-based payment-related expenses can be offset.

3. at the end of the waiting period (that is, the service term condition is met), only the non-market performance condition is met, but the market performance condition is not realized-the cost should be confirmed, and the cost cannot be reversed

in the equity-settled share-based payment, when the incentive object meets the service term condition and the non-market condition in the feasible right condition, it is awarded a set number of equity instruments. Even if the managers can't exercise their rights because they don't meet the market conditions or the vesting rights conditions, the fair value of these equity instruments will drop or even become zero, which will no longer affect the measurement of the total share-based payment expenses. Therefore, the previously confirmed share-based payment-related costs and expenses cannot be reversed, and these expenses will continue to be confirmed in the original waiting period.

the previously recognized capital reserve cannot be transferred to other comprehensive income, but should be transferred to "capital reserve-equity premium" according to the treatment method of the conversion right or stock option that is not exercised within the time limit in Article 1 of Interpretation No.4 of Accounting Standards for Business Enterprises. The relevant entries are:

debit: capital reserve-other capital reserve

credit: capital reserve-equity premium.