Anazazi Co.offers all its 10,000 employees the opportunity to participate in an employee share-purchase plan.Under the terms of the plan, the employees are entitled to purchase 100 ordinary shares (par value $1 per share) at a 20 percent discount.The purchase price must be paid immediately upon acceptance of the offer.In total, 8,500 employees accept the offer, and each employee purchases on average 80 shares at $22 share (market price $27.50).Under IFRS, Anazazi Co.will record

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Under IFRS, the compensation expense is calculated as the difference between the fair value of the shares and the amount paid by employees. The fair value is $27.50 per share, and employees pay $22 per share. The difference is $5.50 per share. With 8,500 employees purchasing an average of 80 shares each, the total compensation expense is 8,500 * 80 * $5.50 = $3,740,000.