Amber Ltd grants 100 options to each of its 50 employees on 1 January 2016. Each grant is conditional on the employee working for the company for the next 3 years. The fair value of each option at grant date is 20. The vesting conditions allow the shares to vest as follows At the end of year Condition 31/12/16 If earnings have increased by > 18% 31/12/17 If earnings have increased by > 13% averaged across the 2 year period 31/12/18 If earnings have increased by > 10% averaged across the 3 year period (a) Data for the year ended 31st December 2016 is as follows: Actual increase in earnings: 14% Employee departures: 3 Anticipated increase in earnings for y/e 31st December 2017: 14% therefore the shares will vest at the end of year 2 Anticipated 3 employee departures during y/e 31st December 2017: Required: Calculate the expense to be recognised by Amber Ltd for 2016. (20 marks) (b) Data for the year ended 31st December 2017 is as follows: Actual increase in earnings: 10%; Employee departures: 2 Anticipated increase in earnings for y/e 31st December 2017: 6% Anticipated employee departures during y/e 31st December 2018: 2 Required: Calculate the expense to be recognised by Amber Ltd in 2017. (25 marks) (c) Data for the year ended 31st December 2018 is as follows: Actual increase in earnings: 8% Employee departures: 3 Required: Calculate the expense to be recognised by Amber Ltd in 2018. (25 marks) (d) What is understood by an employee stock option and how is it different from a share appreciate right?