The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to RM6.50 each by 31 December 2018. The fair value is determ
The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to RM6.50 each by 31 December 2018. The fair value is determ
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1 January 2016, the management of ZAIDY granted an option for 3,000 shares to an
employee on condition that he stays in the employment of ZAIDY for three years. Also, the
option cannot be exercised till the share price has increased to RM20 per share by the end of
the third year.
The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to
RM6.50 each by 31 December 2018. The fair value is determined taking into consideration
that the share price will rise to more that RM20 each.
Required:
Calculate the amount recognized in the statement of profit or loss and the amount disclosed
as equity in the statement of financial position.
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