1 A company issued share options on 1 June 20x6 to pay for the purchase of inventory. The inventory is eventually sold on 31 December 20X8. The value of the inventory on 1 June 20x6 was £6m and this value was unchanged up to the date of sale. The sale proceeds were £8m. The shares issued have a market value of £6.3m. 

How will this transaction be dealt with in the financial statements?.

2 Jay, a public limited company, has granted 300 share appreciation rights to each of its 500 employees on 1 July 20X5. The management feel that as at 31 July 20X6, the year-end of Jay, 80% of the awards will vest on 31 July 20x7. The fair value of each share appreciation right on 31 July 20x6 is £15. 

What is the fair value of the liability to be recorded in the financial statements for the year ended 31 July 20X6?