On January 1,2011, Smart Inc. granted 200 share options each to 1,000 employees, conditional upon the employee’s remaining in the entity’s employ during the vesting period. The share options vests at the end of the three-year period. On grant date, each share option has a fair value of P15. By December 31,2011, 200 employees have left and it is expected that on the basis of a weighted average probability, a further 100 employees will leave during the vesting period. By December 31,2012, 150 employees have left and it is expected that a further 50 employees will leave during 2013. By December 31,2013, 100 employees have left. Ten share options are needed for the purchase of one Ordinary Shares with par value of P10 at P12 per share. On January 1,2014, all share options are exercised. Required: A. Prepare the adjusting entry on December 31,2011, 2012 and 2013. B. Based on your audit, determine the following: ____________1. Compensation expense in 2011 ____________2. Compensation expense in 2012 ____________3. Compensation expense in 2013
Share-based Compensation (Share Options) (PFRS 2)
Problem 20. On January 1,2011, Smart Inc. granted 200 share options each to 1,000 employees,
conditional upon the employee’s remaining in the entity’s employ during the vesting period. The share
options vests at the end of the three-year period. On grant date, each share option has a fair value of
P15. By December 31,2011, 200 employees have left and it is expected that on the basis of a
weighted average probability, a further 100 employees will leave during the vesting period. By
December 31,2012, 150 employees have left and it is expected that a further 50 employees will leave
during 2013. By December 31,2013, 100 employees have left. Ten share options are needed for the
purchase of one Ordinary Shares with par value of P10 at P12 per share. On January 1,2014, all
share options are exercised.
Required: A. Prepare the
B. Based on your audit, determine the following:
____________1. Compensation expense in 2011
____________2. Compensation expense in 2012
____________3. Compensation expense in 2013
____________4. Share Options on December 31,2011
____________5. Share Options on December 31,2012
____________6. Share Options on December 31,2013
____________7. Share Premium from issuance of Ordinary Shares on January 1,2014
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