Solution-Compute the amounts of expense and the related

Compute the amounts of expense and the related liability

Reference no: EM133180878

Question - On 1.1.2017, MEERA Bhd grants to an employee the right to choose either 12,000 shares or cash payment equal to the value of 10,000 shares (phantom shares). The grant is conditional upon the employee remaining in the company's employ for three years. If the employee chooses the share alternative, the shares must be held for three years after vesting date.

At grant date, the company's share price is RM5.00. At the end of year 2017, 2018 and 2019, the share price is RM5.20, RM5.60 and RM6.20, respectively. After taking into account the post-vesting transfer restrictions, the grant date fair value of the share alternative is RM4.90.

MEERA shares have a nominal value of RM1 each.

Required -

a) Compute the amounts of expense and the related liability and equity components in each year.

b) Show the effect if, at the end of year 2019, the employee chooses:

(i) the cash settlement, and

(ii) the equity settlement

Reference no: EM133180878

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Compute the amounts of expense and the related liability

Reference no: EM133180878

Reference no: EM133180878

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