Reference no: EM132460506

The first financial instrument was a compensatory stock option plan that was granted to 12 key management positions for the first time. The company wanted to provide these employees with additional compensation and due to financial constraints could not increase salaries. The plan granted these management employees 7,500 options each to purchase shares at $40 each when they were actually worth $80. The options were granted on January 1, 2020 and were exerciser within a two year period beginning January 1, 2020 if the employee was still employed with the company at the time of exercise. A fair value options pricing model determined total compensation to be $820,000.

Question 1: Assume that there are no forfeitures. On January 1, 2022, two employees exercised the options.

Question 2: Determine how to account for these under ASPE and IFRS.