On 1 January 2019, a company which prepares accounts to 31 December grants "share appreciation rights" to 30 of its employees. By virtue of these rights, the employees concerned will become entitled to a cash payment on 31 December 2021 on condition that they are still employees of the company at that date. The amount of this cash payment will depend upon the overall increase in the company's share price over the three years between 1 January 2019 and 31 December 2021.

On 31 December 2019, the company estimates that 29 of the employees will remain with the company until 31 December 2021. The fair value of the share appreciation rights at 31 December 2019 is £2,400 per employee. On 31 December 2020, the company estimates that 26 of the employees will remain with the company until 31 December 2021. The fair value of the share appreciation rights at 31 December 2020 is £3,000 per employee. On 31 December 2021, 24 of the employees are still employed by the company. The fair value of the share appreciation rights on that date is £2,150 per employee.

Show how these transactions should be treated in the company's financial statements.