On 1 October 2021, Shildon plc granted 500 £1 share appreciation rights (SARS) to each of its 2,000 employees. Employees will be eligible to exercise their rights on 30 September 2024, if they remain employed by Shildon plc. On 30 September 2022, Shildon plc estimated that 10% of employees would leave within the vesting period and forfeit their rights to the SARS. On 30 September 2023, the estimate of total leavers was revised to 25%. On 1 October 2021, the fair value of each £1 SAR was £5. This fair value of each £1 SAR was £6 on 30 September 2022 and £8 on 30 September 2023. The SAR liability was correctly calculated in accordance with IFRS 2 Share-based payments on 30 September 2022. Required Advise the directors of Shildon plc on the accounting treatment of the SARS in the year ended 30 September 2023.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

6

On 1 October 2021, Shildon plc granted 500 £1 share appreciation rights (SARs) to each of its 2,000 employees. Employees will be eligible to exercise their rights on 30 September
2024, if they remain employed by Shildon plc. On 30 September 2022, Shildon plc estimated that 10% of employees would leave within the vesting period and forfeit their rights to
the SARS. On 30 September 2023, the estimate of total leavers was revised to 25%. On 1 October 2021, the fair value of each £1 SAR was £5. This fair value of each £1 SAR was
£6 on 30 September 2022 and £8 on 30 September 2023. The SAR liability was correctly calculated in accordance with IFRS 2 Share - based payments on 30 September 2022.
Required Advise the directors of Shildon plc on the accounting treatment of the SARS in the year ended 30 September 2023.
Transcribed Image Text:On 1 October 2021, Shildon plc granted 500 £1 share appreciation rights (SARs) to each of its 2,000 employees. Employees will be eligible to exercise their rights on 30 September 2024, if they remain employed by Shildon plc. On 30 September 2022, Shildon plc estimated that 10% of employees would leave within the vesting period and forfeit their rights to the SARS. On 30 September 2023, the estimate of total leavers was revised to 25%. On 1 October 2021, the fair value of each £1 SAR was £5. This fair value of each £1 SAR was £6 on 30 September 2022 and £8 on 30 September 2023. The SAR liability was correctly calculated in accordance with IFRS 2 Share - based payments on 30 September 2022. Required Advise the directors of Shildon plc on the accounting treatment of the SARS in the year ended 30 September 2023.
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Evaluating Executive Compensations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education