share based compensation Problem 21. On January 1, 2011, Globe Inc. granted 300 share options each to 100 employees,conditional upon the employee's remaining in the entity's employ during the vesting period. The shareoptions vest at the end of the three-year period. On grant date, each share option has a fair value ofP15. On January 1, 2012, Globe Inc. waived the condition for the release of the share options whichresulted to the acceleration of the vesting period.Required: Based on your audit, determine the following:_1. Compensation expense for the year ended December 31, 2012_2. Assuming there is no waiver of the condition but instead Globe settled the stock optionon January 1, 2013 by paying P350,000, what is the gain/(loss) on settlement of share option?Problem 22. On January 1, 2015, WAY Inc. granted 100 share options to its 500 employees. Theshare options are subject to the condition that the employees must remain to the company for aperiod of 3 years. The share option is not traded at the stock market. Each share option entitles theholder to acquire one ordinary share with P2 par value for P5 per share. The ordinary shares of WAYInc. which are listed at the stock market are trading at the following prices: 12/31/2015 - P8;12/31/2016 – P7; 12/31/2017 - P10.As of December 31, 2015, 80 employees have left and the company estimated based onweighted average probability that 20 employees will leave during the vesting period. As of December31, 2016, 40 employees have left and the company estimated based on weighted average probabilitythat 30 employees will leave during the vesting period. As of December 31, 2017, 130 employeeshave left. On January 1, 2018, all share options are exercised.Required: Determine the following:1. Share option as of December 31, 20152. Compensation expense for the year ended December 31, 20163. Compensation expense for the year ended December 31, 20174. Net increase in share premium for the year ended December 31, 2018

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Problem 21. On January 1, 2011, Globe Inc. granted 300 share options each to 100 employees, conditional upon the employee's remaining in the entity's employ during the vesting period. The share options vest at the end of the three-year period. On grant date, each share option has a fair value of P15. On January 1, 2012, Globe Inc. waived the condition for the release of the share options which resulted to the acceleration of the vesting period. Required: Based on your audit, determine the following: 1. Compensation expense for the year ended December 31, 2012 2. Assuming there is no waiver of the condition but instead Globe settled the stock option on January 1, 2013 by paying P350,000, what is the gain/(loss) on settlement of share option?

Problem 21. On January 1, 2011, Globe Inc. granted 300 share options each to 100 employees, conditional upon the employee's remaining in the entity's employ during the vesting period. The share options vest at the end of the three-year period. On grant date, each share option has a fair value of P15. On January 1, 2012, Globe Inc. waived the condition for the release of the share options which resulted to the acceleration of the vesting period. Required: Based on your audit, determine the following: 1. Compensation expense for the year ended December 31, 2012 2. Assuming there is no waiver of the condition but instead Globe settled the stock option on January 1, 2013 by paying P350,000, what is the gain/(loss) on settlement of share option?

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Question

share based compensation

Problem 21. On January 1, 2011, Globe Inc. granted 300 share options each to 100 employees,
conditional upon the employee's remaining in the entity's employ during the vesting period. The share
options vest at the end of the three-year period. On grant date, each share option has a fair value of
P15. On January 1, 2012, Globe Inc. waived the condition for the release of the share options which
resulted to the acceleration of the vesting period.
Required: Based on your audit, determine the following:
_1. Compensation expense for the year ended December 31, 2012
_2. Assuming there is no waiver of the condition but instead Globe settled the stock option
on January 1, 2013 by paying P350,000, what is the gain/(loss) on settlement of share option?
Problem 22. On January 1, 2015, WAY Inc. granted 100 share options to its 500 employees. The
share options are subject to the condition that the employees must remain to the company for a
period of 3 years. The share option is not traded at the stock market. Each share option entitles the
holder to acquire one ordinary share with P2 par value for P5 per share. The ordinary shares of WAY
Inc. which are listed at the stock market are trading at the following prices: 12/31/2015 - P8;
12/31/2016 – P7; 12/31/2017 - P10.
As of December 31, 2015, 80 employees have left and the company estimated based on
weighted average probability that 20 employees will leave during the vesting period. As of December
31, 2016, 40 employees have left and the company estimated based on weighted average probability
that 30 employees will leave during the vesting period. As of December 31, 2017, 130 employees
have left. On January 1, 2018, all share options are exercised.
Required: Determine the following:
1. Share option as of December 31, 2015
2. Compensation expense for the year ended December 31, 2016
3. Compensation expense for the year ended December 31, 2017
4. Net increase in share premium for the year ended December 31, 2018

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