Hitech Berhad granted 100 employees an option to buy 1,000 shares in the entity on 1 January 2018 at RM 20 per share. The option will vest on 1 January 2020 for those employees who remained in the employment until the vesting date.

The market values of the option and the shares recorded:

1 January 2018

Shares = RM24 , Option =RM6

1 January 2019

Shares = RM29. option = RM7

On 1 January 2018, the director estimated that 10oZ« of the employees would leave at the end of 2019 and 2019. In actual, 8% of the employees left in the year ended 31 December 2018. The director has now estimated that a further of 6 employees would leave in year ended 31 December 2019.

Required:

In accordance with MFRS 2: Share-based payment:

1. Calculate the amount to be presented in the statement of financial position and statement of profit and loss of the company as at 31 December 2018 and 31 December 2019.

(6 marks)

2. Illustrate the journal entries to record the above transaction for year 2018 and 2019.

Answer rating: 100% (QA)

Calculation of option expense Formula Number of employees Shares per employee Fair value of options ... View the full answer