Ferraro, Inc. established a share-appreciation rights (SARs) program on January 1, 2015, which entitles executives to receive

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Ferraro, Inc. established a share-appreciation rights (SARs) program on January 1, 2015, which entitles executives to receive cash at the date of exercise for the difference between the market price of the shares and the pre-established price of \($20\) on 5,000 SARs. The required service period is 2 years. The fair value of the SARs are determined to be \($4\) on December 31, 2015, and \($9\) on December 31, 2016. Compute Ferraro’s compensation expense for 2015 and 2016.

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Intermediate Accounting IFRS Edition

ISBN: 9781118443965

2nd Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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