Thor Co. granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the difference between P20 and the market price of the share on the date each right is exercised. The service period is 2017 through 2020 and the rights are exercisable in 2021. The market price of the share was P25 and P28 on December 31, 2017, and 2018. What amount should be reported as liability under the share appreciation rights on December 31, 2018?

Problem 9

On January 1, 2017, Star Lord Co offered the top management share appreciation rights with the following terms:

Predetermined priceP100 per share

No. of shares50,000 shares

Service period3 years

ExercisedateJanuary1, 2020

The share appreciation rights are exercised on January 1, 2020. The quoted prices per share are 100, 124, 151, and 151 on January 1, 2017, December 31, 2017, December 31, 2018 and December 31, 2019, respectively. What is the compensation expense for 2019 as a result of the share appreciation rights?