Financial Reporting On January 1, 2020 Company D established a cash settled share appreciation plan for 50executives
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Question:
Financial Reporting
On January 1, 2020 Company D established a cash settled share appreciation plan for 50executives of the company.
Here are the relevant details:
- • Each executive received 5,000 rights
- • The benchmark price established was $ 20.
- • Each executive had the right to receive cash for share appreciation over the benchmark price times the number of rights issued to them.
- • The plan expires on December31, 2024
- • The rights vest after 3 years (December 31, 2022)
- • At the end of 2020 2 executives leave and it is estimated that 4 more will leave before the vesting date.
- • At the end of 2021 2 more executives leave and it is now estimated that 10 more will leave before the vesting date.
- • At the end of 2022 10 more executives leave.
- • At the end of 2022 18 executives exercise their rights
- • At the end of 202312 executives exercise their rights
- • At the end of 2024 6 executives exercise their rights
SAR fair value and market price information is as follows:
- • December 31, 2020 FV=$3.60 MP = $ 21.40
- • December 31, 2021 FV=$3.30 MP = $ 22.10
- • December 31, 2022 FV=$4.10 MP = $ 22.75
- • December 31, 2023 FV=$5.10 MP = $ 24.00
- • December 31, 2024 FV=$3.50 MP = $ 23.50
Question:
Using IFRS prepare journal entries for the years 2020to 2024including the deferred tax entries for each year.Assume a tax rate of 40% for all years.
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
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