Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2018, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $30. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Assuming Yellow prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), what is the compensation expense related to the options to be recorded in 2019?
A) $40,000.
B) $60,000.
C) $95,000.
D) $130,000.

Question

Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2018, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $30. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows:  Assuming Yellow prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), what is the compensation expense related to the options to be recorded in 2019?
A) $40,000. 
B) $60,000. 
C) $95,000. 
D) $130,000.

Quizplus · Accepted Answer

11ea937b_35a0_4e62_a419_f7dbd1b68eac_TB2599_00 The compensation cost is allocated on a straight-line basis over the appropriate vesting (service) period: 11ea937b_35a0_7573_a419_4181c9f110f1_TB2599_00

Yellow Company Is a Calendar-Year Firm with Operations in Several