Access the financial statements of Saskatoon-based PotashCorp., a global fertilizer producer, from the company’s website or SEDAR (www.sedar.com) for the year ended December 31, 2009.
(a) The company has several stock-based compensation plans. Compare and contrast these plans, noting such things as who is eligible, whether they have to buy shares to access any benefit, what the benefit or compensation is based on (profits or stock price), vesting periods, expiry periods, how the compensation cost is determined, where the offsetting amounts are reported (equity or liabilities), and when the compensation expense is recorded and whether it is adjusted or not. Prepare a chart to present your findings. (Note: summarize the same type of plans together.)
(b) Review the financial statements and discuss how the stock plans are accounted for. How much was reported to compensation expense, contributed surplus, and liabilities during the year?
(c) Comment on any professional judgement that is used in accounting for the stock option plans. How have these estimates changed from 2005 to 2009? Comment on what the impact on the compensation expense would be as a result of changes in each of these inputs, if all other inputs remained unchanged.