On January 2, year 1 Argy company\'s granted 12000 stock options to a select gro
ID: 2369595 • Letter: O
Question
On January 2, year 1 Argy company's granted 12000 stock options to a select group of senior emplyees. The requisite service period is three years, with one third of the options vesting at the end of each calendar year (graded vesting). An option pricing model was used to calculate a fair value of $5 for each option on the grant date. The company assumes all 12000 options will vest.
Required: Determine the amopunt to be recognized as compensation expense in year 1, 2, 3 under IFRS AND US GAAP prepare journal entries.
Explanation / Answer
Under IFRS its
4000 * 5 each year i.e $20,000 each year
Under US GAAP its
60,000, 0 and 0
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