Solve the annual and cumulative remuneration expense

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Accounting for share based payment

At the beginning of 2019, Callala Bay Ltd grants 10?000 share options to a senior marketing executive, conditional on that executive remaining in the company's employ until the end of 2021. The share options cannot be exercised unless the share price has increased from $20 at the beginning of 2019 to above $30 at the end of 2021. If the share price is above $30 at the end of 2019, the share options can be exercised at any time during the following 5 years. Callala Bay Ltd applies a binomial option-pricing model that takes into account the possibility that the share price will exceed $30 at the end of 2021 and the possibility that the share price will not exceed $30 at the end of 2021. The fair value of the share options with this market condition is estimated to be $14 per option.

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Question 1: Solve the annual and cumulative remuneration expense to be recognized by Callala Bay Ltd for 2019?

Reference no: EM132552002

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