On January 1,2019, an entity granted to an officer the right to choose either - 5,000, P 25 par ordinary shares or - cash payment equal to 3,500 shares of P 25 par ordinary shares The grant is conditional upon the completion of three years of service. If the officer chooses the share alternative, the shares must be held for three years after the vesting date. On January 1,2019, the price per ordinary share is P 28. The ordinary share prices for the three- year vesting period are: December 31,2019- P 30 December 31,2020- P 35 December 31,2021- P 40 After taking into account the effects of post vesting restrictions, the entity had estimated that the fair value of the share alternative is P 45 per share. How much is accounted for as equity as of January 1,2019? How much is accounted for as a liability as of January 1,2019?

On January 1,2019, an entity granted to an officer the right to choose either - 5,000, P 25 par ordinary shares or - cash payment equal to 3,500 shares of P 25 par ordinary shares The grant is conditional upon the completion of three years of service. If the officer chooses the share alternative, the shares must be held for three years after the vesting date. On January 1,2019, the price per ordinary share is P 28. The ordinary share prices for the three- year vesting period are: December 31,2019- P 30 December 31,2020- P 35 December 31,2021- P 40 After taking into account the effects of post vesting restrictions, the entity had estimated that the fair value of the share alternative is P 45 per share. How much is accounted for as equity as of January 1,2019? How much is accounted for as a liability as of January 1,2019?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 8RE: On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the...

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On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.
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On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share alternative. The provisions include the right to a cash payment equal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value of P40. The grant is conditional upon the completion of three years’ service. If the employees choose the share alternative, the shares must be held for three years after the vesting date.At grant date, the share price is P60. At the end of 2020, 2021 and 2022 the share prices are P63, P66 and P72, respectively.After taking into account the effect of vesting restrictions, the entity estimated that the fair value of the share alternative on grant date is P45. On January 1, 2023, the employees selected the share alternative.What amount of share premium should be recorded from the issuance of shares on January 1, 2023?
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