Determine the resulting share premium from the

10. Determine the resulting share premium from the exercise of the options in 2022
(gross of share options)
a. 800,000
b. 1,800,000
c. 500,000
d. 1,300,000
Problem 7:
On January 1, 2021, an entity granted 100 share options each to 500 employees, conditional
upon the employee’s remaining in the entity’s employ during the vesting period. The share
options vest at the end of a three-year period. On grant date, each share option has a fair value
of P30. The par value per share is P100 and the option price is P120. On December 31, 2022,
30 employees have left and it is expected that on the basis of a weighted average probability, a
further 30 employees will leave before the end of the three-year period. On December 31, 2023,
only 20 employees actually left and all of the share options are exercised on such date.
11. Determine the compensation expense for 2023
12. Determine the resulting share premium when the options were exercised on
December 31, 2023 (gross of share options).
Problem 8:
An entity granted 30,000 share appreciation rights which entitled key employees to receive cash
equal to the difference between P200 and the market price of the share on the date each right is
exercised. The service period is 2021 through 2023 and the rights are exercisable in 2024. The
market price of the share was P250 and P280 on December 31, 2021 and 2022, respectively.
13. What is the compensation expense for 2022?
14. What amount should be reported as liability under the share appreciation rights
on December 31, 2022?
a. . 0

b. 1,600,000
c. 1,300,000
d. 2,400,000
Problem 9:
On January 1, 2021 YL Company granted to an employee the right to choose either 12,000
shares or a cash payment equal to the market value of 10,000 shares. The grant is conditional
upon completion of three years of service.
On January 1, 2021 the share price is P51 while the fair value of the share alternative is P48 per
share. Share prices were P54, P60 and P65 on December 31, 2021, December 31, 2022 and
December 31, 2023 respectively.
15. Determine the compensation expense in 2021