Page 145 - SBR Integrated Workbook STUDENT S18-J19
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Share-based payment
Example 5
Cancellation
An entity granted 2,000 share options at an exercise price of $18 to each of its
25 key management personnel on 1 January 20X4. The options only vest if
the managers are still employed by the entity on 31 December 20X6.
The fair value of the options was estimated at $33 and the entity estimated
that the options would vest with 23 managers. This estimate was confirmed on
31 December 20X4.
In 20X5 the entity decided to base all incentive schemes around the
achievement of performance targets and to abolish the existing scheme for
which the only vesting condition was being employed over a particular period.
The scheme was cancelled on 30 June 20X5 when the fair value of the
options was $60 and the market price of the entity’s shares was $70.
Compensation was paid to the 24 managers in employment at that date, at a
rate of $63 per share option.
How should the entity recognise the above?
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