Page 141 - SBR Integrated Workbook STUDENT S18-J19
P. 141
Share-based payment
Example 3
Market-based conditions
On 1 January 20X1 Coleridge grants 1 million share options to each of its 8
directors. These will vest on 31 December 20X2 if the directors are still
employed and if the share price of Coleridge exceeds $5 per share on that
date. On 1 January 20X1, the fair value of each share option was $0.50.
By 31 December 20X1, none of the directors had left but it was estimated that
two would leave prior to the vesting date. The share price of Coleridge was $2
on 31 December 20X1 and it was not expected to rise significantly.
Discuss the accounting treatment of the above in the year ended 31
December 20X1.
135
