Page 143 - SBR Integrated Workbook STUDENT S18-J19
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Share-based payment
Example 4
Modifications
On 1 January 20X1, Fenrir grants 300,000 share options to each of its 20 key
management personnel. The share options will vest if the managers remain
employed on 31 December 20X3. The fair value of the options at the grant
date is $7. The exercise price of the options was $15. In the year ended 31
December 20X1, one manager left and another was expected to leave prior to
the vesting date.
On 1 January 20X2, Fenrir’s share price falls. The share option scheme is
modified by reducing the exercise price to $10. The fair value of the share
options was $2 immediately before the re-pricing and $6 immediately
afterwards. In the year ended 31 December 20X2, two managers left and one
more was expected to leave prior to the vesting date.
Calculate the share-based payment expense in the year ended 31
December 20X2.
137
