Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2021, the company issued 312,000 executive stock options permitting executives to buy 312,000 shares of Pastner stock for $32 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2021 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2021, as follows: Vesting Date Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Amount Vesting 25% 25% 25% 25% Shares Vesting at: Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Total Fair Value per Option Assume Pastner prepares its financial statements using International Financial Reporting Standards (IFRS). Required: Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. (Round your answers to 2 decimal places. Enter your answers in thousands.) 2021 $5.50 $6.00 $6.50 $7.00 Compensation Expense Recorded in: 2023 2024 2022 Total
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2021, the company issued 312,000 executive stock options permitting executives to buy 312,000 shares of Pastner stock for $32 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2021 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2021, as follows: Vesting Date Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Amount Vesting 25% 25% 25% 25% Shares Vesting at: Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2024 Total Fair Value per Option Assume Pastner prepares its financial statements using International Financial Reporting Standards (IFRS). Required: Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. (Round your answers to 2 decimal places. Enter your answers in thousands.) 2021 $5.50 $6.00 $6.50 $7.00 Compensation Expense Recorded in: 2023 2024 2022 Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1,
2021, the company issued 312,000 executive stock options permitting executives to buy 312,000 shares of Pastner stock for $32 per
share. One-fourth of the options vest in each of the next four years beginning at December 31, 2021 (graded vesting). Pastner elects to
separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost
for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2021, as follows:
Vesting Date
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2024
Shares
Vesting at:
Amount
Vesting
25%
25%
25%
25%
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2024
Total
Assume Pastner prepares its financial statements using International Financial Reporting Standards (IFRS).
Required:
Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the
compensation cost for each of the four groups (tranches) separately. (Round your answers to 2 decimal places. Enter your answers
in thousands.)
Fair Value
per Option
2021
$5.50
$6.00
$6.50
$7.00
Compensation Expense Recorded in:
2023
2024
2022
Total
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