On 1 July 2009 Lancaster Ltd grants 100 share options to each of its 50 employees conditional upon the employee working for the entity for the next three years.The entity estimates the fair value of each share option at $13.Based on probability estimates,25 employees are expected to leave the entity before the options vests.In accordance with AASB 2,how much remuneration expense related to the share option issue should Lancaster Ltd recognise for the year ended 30 June 2010?
A) Zero
B) $10,833
C) $32,500
D) $65,000
E) None of the given answers.

Question

Quizplus · Accepted Answer

The remuneration expense is calculated as: (100 options * 50 employees * $13 fair value * (1 - 25/50 expected to leave)) / 3 years = $10,833 for the first year.

On 1 July 2009 Lancaster Ltd Grants 100 Share Options