Gordo granted shares options to its employees on 1 October x2 as follows: On 30 September X3
Question:
Gordo granted shares options to its employees on 1 October x2 as follows:
On 30 September X3 - employees could potentially receive 2 million ordinary shares of RM1 each. Estimated 90% of the employees achieved their performance target and were eligible for the shares. The fair value was RM2.
On 30 September x4 - a further 3 million ordinary shares could be vested. The options due to be vested on 30 September x4 relate to the performance of the employees over the period 1 October x2 to 30 September x4. It is hoped that 96% of the employees will achieve their performance targets. The fair value was RM3.
Required:
Explain the effect of the above options in the financial statement of Gordo at 30 September x3 and 30 September x4.
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer