Question
Problem 1 - Stock Options (30) FIU Inc granted 2,500 stock options to its top management team on January 1, Year 1. The options vest
Problem 1 - Stock Options (30)
FIU Inc granted 2,500 stock options to its top management team on January 1, Year 1.
The options vest at the end of 5 years (cliff vesting). The grant-date fair value of each
option is $100. No forfeitures are expected to occur. The company is expensing the cost
of the options on a straight-line basis over the 5-year period. On January 1, Year 2, the
fair value of each option is $95. On January 1, Year 3, the fair value is $98. On January
1, Year 4 the fair value of each option is $96.
Required:
Determine the amount to be recognized as compensation expense for each of the 5
years under (a) IFRS, and (b) US GAAP.
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