On January 1, 2011, Svetlana Company granted to employees a share-basedpayment with cash and share alternative. The provisions include the right to a cash paymentequal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value ofP40. The grant is conditional upon the completion of three years' service. If the employees choose the share alternative, the shares must be held for three years after vesting date. At grant date, the share price is P60. At the end of 2011, 2012 and 2013, the share prices areP63, P65 and P72, respectively. Svetlana does not expect to pay dividends in the next three years. After taking into account the effect of post vesting transfer restrictions, Svetlana Company estimated that the grant date fair value of the share alternative is P46. On January 1, 2014, the employees selected the share alternative.   What is the share premium if the employee has chosen the share alternative on December 31, 2013?

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

On January 1, 2011, Svetlana Company granted to employees a share-basedpayment with cash and share alternative. The provisions include the right to a cash paymentequal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value ofP40. The grant is conditional upon the completion of three years' service. If the employees choose the share alternative, the shares must be held for three years after vesting date. At grant date, the share price is P60. At the end of 2011, 2012 and 2013, the share prices areP63, P65 and P72, respectively. Svetlana does not expect to pay dividends in the next three years. After taking into account the effect of post vesting transfer restrictions, Svetlana Company estimated that the grant date fair value of the share alternative is P46. On January 1, 2014, the employees selected the share alternative.

 

What is the share premium if the employee has chosen the share alternative on December 31, 2013?

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Derivatives and Hedge Accounting
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.
Similar questions
  • SEE MORE QUESTIONS
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