In a share appreciation right to a manager granted on January 1, 2020 for 20,000 shares at 100 pesos fair value. Assuming the share appreciation rights are vested immediately and he exercised it only after a year or in 2021, how much is the compensation expense that the company would most likely recognize on December 31, 2020 given that the fair value of the share went down to 80 pesos on the balance sheet date due to the pandemic?  a.2,000,000 b.1,600,000 c.500,000 d.0

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 17P
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In a share appreciation right to a manager granted on January 1, 2020 for 20,000 shares at 100 pesos fair value. Assuming the share appreciation rights are vested immediately and he exercised it only after a year or in 2021, how much is the compensation expense that the company would most likely recognize on December 31, 2020 given that the fair value of the share went down to 80 pesos on the balance sheet date due to the pandemic? 

a.2,000,000
b.1,600,000
c.500,000
d.0

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