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How much is the total compensation expense

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Question - On January 1, 2022, Cheong Su Corp. grants 300 share options to each of its 400 employees. Each grant is conditional upon the employee remaining in the employ of the company over the next three years. Cheong Su estimates that the fair value of each option is P25. On the basis of weighted average probability, Cheong Su estimates that 100 employees will leave during the three-year period and therefore their right to the share option will be forfeited.

During 2022, 30 employees had left and Cheong Su estimates that a further 60 employees will leave during 2022 and 2023. During 2023, 35 employees left the company and the company estimates that 28 employees will leave in 2023. At the end of 2023, the entity decided to decrease the exercise price so that Cheong Su reprices its share options, and that the repriced share options vest at the end of 2024. During 2024, 34 employees left the company.

At the end of 2023 (date of repricing), the company estimates that the fair value of each of the original share options granted (before taking into account the repricing) is P25 and that the fair value of each repriced share option is P30.

Required -

1. How much is the total compensation expense in 2022?

2. How much is the total compensation expense in 2023?

Reference no: EM133110198

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