Oswald Industries Corp. (OIC) issued 10,000 share options to its employees in the year. The options vest in two years, and the share compensation expense is being recorded over the two-year vesting period. Management expects 75% of the employees who received options to still be working at OIC when the shares vest. OIC follows ASPE. Agnes is responsible for recording the share options in OIC's financial statements. Which of the following describes the effect of the employees who leave OIC prior to the vesting date on the measurement of the compensation expense? 

A. Agnes should record the full compensation expense now, and then decrease the amount when each employee leaves. 

B. Agnes should record compensation expense only for the 75% of employees that are expected to still be working at OIC on the vesting date. 

C. Agnes should record the full compensation expense, regardless of the employees who will leave before the vesting date has been reached. 

D. Agnes should record the full compensation expense now, and then decrease compensation expense for the employees who have left on the vesting date.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Introduction When a company issues share options to employees it incurs a share compensat... View the full answer