ottesloe Ltd has granted its managing director 50 000 share options conditional upon him remaining with the company for a further five years. In addition, the share price must increase by 50 per cent before the end of year 5. REQUIRED How should Cottesloe Ltd account for the above vesting conditions?

ottesloe Ltd has granted its managing director 50 000 share options conditional upon him remaining with the company for a further five years. In addition, the share price must increase by 50 per cent before the end of year 5. REQUIRED How should Cottesloe Ltd account for the above vesting conditions?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Isadore Bell Company granted 8 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $3 per share on January 1, 2021, the grant date. When calculating diluted EPS at December 31, 2022, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $4 per share during 2022?
Ice Shave Entity writes a put option on Dec 31, 20x1 to purchase 5000 shares in exchange for a $5,000 premium. Under the contract, Ice Shave may be required to purchase $100,000 of its own shares two years from now (PV of 82,645). The contract may be settled only under gross physical delivery method. Record all the necessary journal entries.
At the beginning of year 1, James Ltd grants 100 share options to each of its 120 employees, conditional on the employee remaining in the employ of James Ltd over the next 2 years. The company estimates that the fair value of the options on grant date is $12. On the basis of a weighted average probability, James Ltd estimates that 15% of its employees will leave during the vesting period. At the end of year 1, ten employees have left, and James Ltd estimates that a further five will leave during year 2. By the end of year 1, the company's share price has dropped, and it decides to reprice the share options. It estimates that the fair value of the original share options is $7 and the fair value of the repriced share options is $10. Five employees leave during year 2. Required Prepare a schedule setting out the remuneration expense to be recognised at the end of years 1 and 2.
Required: (a)Assuming a rights issue of shares is made, calculate: (i)the theoretical ex-rights price of an ordinary share in Devonian plc (ii)the value of the rights for each original ordinary share. (b)Calculate the price of an ordinary share in Devonian plc in one year’s time assuming: (i)a rights issue is made (ii)a loan issue is made. Comment on your findings.
13
a) On 1 January 2017, Gyamera Limited granted 100 share options to each of its 300 employees, with each of the share options being conditional upon the employee working for Gyamera Limited until 31 December 2019. At the grant date, the FV of each share option was GHC15.00. During 2017, 15 employees left Gyamera Limited and the company’s directors estimated that a total of 20% of the 300 employees would leave during the three-year period 2017-2019. At the beginning of 2018, Gyamera Limited modified the terms and conditions of the share option by reducing the exercise price. This had the effect of increasing the FV of a share option at the beginning of 2018 by GHC9.00. During 2018, a further six employees left the company and the directors revised their estimate of the total number of the 300 employees to 15% that would leave the company during the three-year period 2017-2019. During 2019, a further five employees left the company. Required; Calculate the remuneration expense that should…
24. On 1 July 2023 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1.00 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2025 but may then exercise them at any time between 1 July 2025 and 30 June 2026. The market price of the Cooloola Ltd shares on 1 July 2023 was $6.50. On 31 December 2025 the share price reaches $7.70, and the chief executive officer decides to exercise her options and acquire the shares in Cooloola Ltd. Required: Account for the issue and exercise of the options in Cooloola Ltd.
What amount should be recognized as compensation expense for the current year?*see attached a. 600,000b. 300,000c. 800,000d. 400,000
On January 1, 2020, ABC Company granted 80,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P65 and the par value per share is P50.At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably.The share options have a life of 4 years which means that the share options can be exercised within one year after vesting. The share prices are P68 on December 31, 2020, P74 on December 31, 2021, P82 on December 31, 2022 and P90 on December 31, 2023. All share options were exercised on December 31, 2023.What is the compensation expense for 2022?