On July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of the company’s ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tools’ ordinary share was P33 per share at the date of grant. No share options were terminated during the year. How much should Tools charge to compensations expense for the year ended December 31, 2016?
On July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of the company’s ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tools’ ordinary share was P33 per share at the date of grant. No share options were terminated during the year. How much should Tools charge to compensations expense for the year ended December 31, 2016?
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