Reference no: EM132795626

On January 1, 2019, Christmas Gift Morty Corporation grants 100 cash share appreciation rights (SARs) to each of its 200 employees, on condition that the employees remain on its employ for the next three years.

1. During 2019, 14 employees left. The entity estimates that a further 24 will leave during 2020 and 2021.
2. During 2020, 10 employees left and the entity estimates that a further 8 will leave during 2021.
3. During 2021, 6 employees left. At the end of 2021, 60 employees exercised their SARs, 40 employees exercised their SARs at the end of 2022 and the remaining employees exercised their SARs at the end of 2023.

The entity estimates the fair value of the SARs at the end of each year in which a liability exists as shown below. At the end of 2021, all SARs held by the remaining employees vest.

The intrinsic value of the SARs at the date of exercise (which equal to the cash paid out) at the end of 2021, 2022 and 2023 are also shown below:

                                      Fair value                    Intrinsic value
December 31, 2019             30

December 31, 2020                32

December 31, 2021                        36                        35

December 31, 2022                     42                        40

December 31, 2023                                                    46

Problem 1: How much is the compensation expense for 2021?

Problem 2: How much is the compensation expense for 2022?

Problem 3: How much is the compensation expense for 2023?