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## 7.3.3  Long-term incentive plan (performance shares) 

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Transferred performance shares comprise performance shares that have been granted to employees who have either moved between management categories or left the Group during the year. Adjusted performance shares comprise the change in number of performance shares expected to vest based on the development of the vesting conditions. 

## ASSUMPTIONS 

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## 7.3.1 ACCOUNTING POLICIES 

The fair value of equity-settled programmes is measured at the grant date and recognised in the income statement under staff costs, net over the vesting period with a corresponding increase in equity. 

The fair value of granted share options and PSUs is estimated using the Black-Scholes call option pricing model, taking into account the terms and conditions upon which the options were granted. 

The fair value of granted performance shares is estimated using a stochastic (quasi-Monte Carlo) valuation model, taking into account the terms and conditions upon which the performance shares were granted. 

On initial recognition of share options, PSUs and performance shares, an estimate is made of the number of awards expected to vest. The estimated number is subsequently revised for changes in the number of awards expected to vest. Accordingly, recognition is based on the number of awards that ultimately vested. 

There were no exercisable performance shares in the long-term incentive plan at 31 December 2013. The granted number of performance shares included in the specifica- tion is the number of performance shares that are expected to vest. The estimated number is revised on a regular basis until vesting. 

