QUESTION SEVENTEEN b) A company grants 2,000 share options to each of its three directors on 1 January 2012 subject to the directors being employed on 31 December 2014. The options vest on 31 December 2014. The FV of each option on 1 January 2012 is GHC10 and it is anticipated that all of the share options will vest on 31 December 2014. The options will only vest if the company's share price reaches GHC14 per share. The price at 31 December 2012 was GHC8 and it is not anticipated that it will rise over the next two years. It is anticipated that there will only be two directors employed on 31 December 2014. Requirement How will the share options be treated in the financial statements for the year ended 31 December 2012? QUESTION EIGHTEEN Jack and Jill AB granted 200 options on its ordinary shares of no par value to each of its 800 employees on 1 January 2011. Each grant is conditional upon the employee being employed by Jack and Jill AB until 31 December 2013. Jack and Jill AB estimated at 1 January 2011 that: (i) (ii) The fair value of each option was GH4.00 (before adjustment for the possibility of forfeiture). Approximately 50 employees would leave during the 2011, 40 during 2012 and 30 during 2013 thereby forfeiting their rights to receive the options. The departures were expected to be evenly spread within each year. The exercise price of the options was GH1.50 and the market value of a Jack and Jill AB share on 1January 2011 was GH3.00 In the event, only 40 employees left during 2011 (and the estimate of total departures was revised down to 95 at 31 December 2011), 20 during 2012 (and the estimate of total departures was revised to 70 at 31 December 2012) and none during 2013, spread evenly during the year. Required: The directors Jack and Jill AB have asked you to illustrate how the scheme is accounted for under IFRS2 Share-based payment.