Question
Merkley Company is a calendar-year firm with operations in several countries. At January 1, 2024, the company had issued 52,000 executive stock options permitting executives
Merkley Company is a calendar-year firm with operations in several countries. At January 1, 2024, the company had issued 52,000 executive stock options permitting executives to buy 52,000 shares of stock for $42. The vesting schedule is 25% the first year, 25% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows:
| Vesting Date | Amount Vesting | Fair Value per Option |
|---|---|---|
| December 31, 2024 | 25% | $ 6 |
| December 31, 2025 | 25% | $ 7 |
| December 31, 2026 | 50% | $ 9 |
Assuming Merkley prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), what is the compensation expense related to the options to be recorded in 2025?
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