Question

Lion Company granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the differen...


Lion Company granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the difference between P20 and the market price of the share on the date each right is exercised. The service period is 2019 through 2021, and the rights are exercisable in 2022. The market price of the share was P25 and P28 on December 31, 2019 and 2020, respectively. How much should be recorded as compensation expense for 2020?

Copenhagen Company granted 200 share appreciation rights to each of the 500 employees on January 1, 2016. The rights are due to vest on December 31, 2019 with payment being made on December 31, 2020. Only 80% of the awards vest. January 1, 2016 (predetermined price)150 December 31, 2016 : 180 December 31, 2019 : 210 December 31, 2020 : 190 What amount should be recognized as gain on reversal of share appreciation rights on December 31, 2020?

Answer

Step 1

Hello. Since your question has multiple parts, we will solve first question for you. If you want remaining sub-parts to be solved, then please resubmit the whole question and specify those sub-parts you want us to solve.

Step 2

Stock appreciation rights are the plans under which payment is made in cash at the end of vesting period which is based on the market price of the shares.

Formulation

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Computation

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