1 A company issued share options on 1 June 20x6 to pay for the purchase of inventory. The inventory is eventually sold on 31 December 20X8. The value of the inventory on 1 June 20x6 was £6m and this value was unchanged up to the date of sale. The sale proceeds were £8m. The shares issued have a market value of £6.3m. 

How will this transaction be dealt with in the financial statements?.

2 Jay, a public limited company, has granted 300 share appreciation rights to each of its 500 employees on 1 July 20X5. The management feel that as at 31 July 20X6, the year-end of Jay, 80% of the awards will vest on 31 July 20x7. The fair value of each share appreciation right on 31 July 20x6 is £15. 

What is the fair value of the liability to be recorded in the financial statements for the year ended 31 July 20X6?

Answer rating: 100% (QA)

1 Share Options on June 01 20X6 Here Recording of liability will be at June 01 20X6 Inventory Purchases Ac Dr To Equity Settlement Liability Ac Above ... View the full answer