ACCA Strategic Professional · Strategic Business Reporting (International) · Share-based payment
At 31 December 20X1 Orla Co carried a cash-settled SAR liability of $180,000. At 31 December 20X2 (year 2 of a three-year vesting period) the fair value per SAR has risen and the cumulative calculation gives 450 employees × 100 SARs × $15 × 2/3. What is the expense for 20X2?
The 20X2 expense is $270,000. The closing liability is 45,000 SARs at $15 times two thirds, giving $450,000. Deducting the $180,000 liability already recognised at the start of the year leaves the charge for the year.
- A$270,000Correct
- B$450,000
- C$180,000
- D$675,000
Explanation
Closing liability = 45,000 × $15 × 2/3 = $450,000. Less the opening liability $180,000 gives an expense of $270,000. $450,000 forgets to deduct the prior-year charge.
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