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.

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

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