On January 1, 2020, Baxcon Company granted to a senior executive 33,000 share options, conditional upon theexecutive's remaining in the entity's employ until December 31, 2022. The par value per share is P50. The exercise price isP100. However, the exercise price drops to P80 if the entity's earnings increase by at least an average of 10% per year overthe three-year period. On grant date, the entity estimated that the fair value of the share option is P30 if the exercise price isP80. If the exercise price is P100, the fair value of the share option is P25. During 2020 and 2021, the earnings increasedby 11% and 12% respectively. However, during 2022, the earnings increased only by 4%. What amount should berecognized as compensation expense in 2022?

A monetary or non-cash reward provided in return for work done is referred to as compensation. Base…

utive's remaining in the entity's employ until December 31, 202 . However, the exercise price drops to P80 if the entity's earnin nree-year period. On grant date, the entity estimated that the faim If the exereise price is P100 the fair value of the share ontion

utive's remaining in the entity's employ until December 31, 202 . However, the exercise price drops to P80 if the entity's earnin nree-year period. On grant date, the entity estimated that the faim If the exereise price is P100 the fair value of the share ontion

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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