Please help me, URGENT!

ABC granted 10,000 employee stock options ( i.e ., the the exercise price was equal to the stock price on the grant date). To align the compensation of the employees with the financial performance of the company, the award will vest only if cumulative* revenue over the following three - year reporting period is greater than $100 million and the employees are still employed by ABC of the date of the grant, management believes it is probable that the company will achieve cumulative revenue in excess of $100 million over the following three - year period. Each award has a grant- date fair value of $15. Gigabyte's valuation professionals have indicated that $12 if the revenue target was factored into the fair value assessment, the grant- date fair value would be

ASC 718, Compensation - Stock Compensation Revenue in each of the next three years was as follows: 2010: $30 million 2011: $20 million 2012: $50 million

Required 1. Should ABC use the $ 12 grant- date fair value or the $15 grant- date fair value to measure its compensation cost? Citation from ASC is required to support your conclusion.

2. Over how many years should ABC recognize compensation cost associated with the stock options, and how much, if any, should be recognized in each of those years? The effects of forfeitures and income taxes should be ignored. Citation from ASC is required to support your conclusion.

3. At the end of Year 2, due to poor earnings, the stock price of ABC has fallen significantly. Management determined that the performance condition of cumulative revenue in excess of $100 million over the three - year period was improbable of achievement. Management decided to modify the terms of the options by decreasing the exercise price on the stock options to $10 and lower the vesting performance condition of cumulative revenue in excess of $100 million to $80 million over the three - year period. These downward adjustments were made in order to ensure that the options continue to provide intended motivational benefit to employees. Immediately prior to the modification of the terms, the fair value was $ 1 per option. After considering the impact of the modification, the fair value was $7 per option. As a result of the modification, what would be the compensation expert for 201 1 and 2012? Citation from ASC is required to support your conclusion.

Thank you in advance!