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Calculate the amounts that the entity will recognise

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Reference no: EM133012267

An entity grants 200 share options to each of its 400 employees. Each grant is conditional upon the employee working for the entity for the next four (4) years. The entity estimates that the fair value of each share option is $25.00.

  • At grant date the entity estimates that 30 per cent of employees will leave during the four-year period and therefore forfeit their rights to the share options (the right to the options would not have vested).

Required:

Problem 1: After applying the requirements of AASB 2 and assuming that everything turns out exactly as expected, calculate the amounts that the entity will recognise during the vesting period for services received as consideration for the share options. Also provide all the necessary journal entries that will be posted for next four years.

Reference no: EM133012267

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