What amount of compensation expense shall be recognized

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Question - On January 1, 20x1, Golf View Village Co. grants 1,000 share options to each of its 180 employees on condition that the employees remain in Golf View's employ until the end of 20x3. The exercise price per share option is 20. The fair value per share option is 80.

On December 31, 20x1, Golf View modifies the share option grant by reducing the exercise price to 60. This resulted to an increase in the fair value per option before the modification of 100 to 120 after the modification.

1. What amount of compensation expense shall be recognized in 20x1?

a. 4,800,000 b. 3,600,000 c. 1,800,000 d. 1,200,000

2. What amount of compensation expense shall be recognized in 20x2?

a. 4,800,000 b. 6,600,000 c. 7,200,000 d. 9,600,000

Reference no: EM132860460

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