QUESTION 9 FAR660: DEC 2019 On 1 January 2015 Orchid Bhd entered into a share- based...

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QUESTION 9 FAR660: DEC 2019 On 1 January 2015 Orchid Bhd entered into a share- based payment contract with one (1) of its key personnel. The contract gave Orchid Bhd the choice of paying the personnel either 8,000 shares or cash which is equivalent to 5,000 shares. The fair value of the share alternative on grant date was estimated at RM4.00 per share, after taking into account the effects of post- vesting transfer restrictions. The vesting period under the agreement was two (2) years. The general practice of the company is to settle its obligation in cash unless requested otherwise by the counterparty. The fair value of the company's shares is RM 5.00 as at 1 January 2015; RM8.00 as at 31 December 2015; and RM12 as at 31 December 2016. Required: a. Calculate the amount to be recognized as expenses and liabilities for the years ended 31 2016. b. December 2015 and 31 December (5 marks) Explain how the transaction above should be treated in accordance to MFRS 2 Share- based payment. (5 marks) C. Based on equity-settled transactions, advice on how a company should determine the fair value for transacting with employees and non- employees. (5 marks) (Total: 15 marks) QUESTION 9 FAR660: DEC 2019 On 1 January 2015 Orchid Bhd entered into a share- based payment contract with one (1) of its key personnel. The contract gave Orchid Bhd the choice of paying the personnel either 8,000 shares or cash which is equivalent to 5,000 shares. The fair value of the share alternative on grant date was estimated at RM4.00 per share, after taking into account the effects of post- vesting transfer restrictions. The vesting period under the agreement was two (2) years. The general practice of the company is to settle its obligation in cash unless requested otherwise by the counterparty. The fair value of the company's shares is RM 5.00 as at 1 January 2015; RM8.00 as at 31 December 2015; and RM12 as at 31 December 2016. Required: a. Calculate the amount to be recognized as expenses and liabilities for the years ended 31 2016. b. December 2015 and 31 December (5 marks) Explain how the transaction above should be treated in accordance to MFRS 2 Share- based payment. (5 marks) C. Based on equity-settled transactions, advice on how a company should determine the fair value for transacting with employees and non- employees. (5 marks) (Total: 15 marks)