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HI SIR!
In answer of part b pg 417,
31-12-20X8, Bal c/fwd: (428*50%*200 shares* $12), where from that 50% came, no clues in the given Question, there is mention that only 5% employees leave every year.
plz solve this issueOr maybe (I don’t have the question available this weekend) the figures are brought forward from the end of the second year of a four year vesting period?
Hello Mike
Would you please help me about this question.
1- A part of the questions says : “…Growler granted 200 cash share appreciation rights (SARs) to each of its 500 employess, …”.
Also the questions the fair value of SARs and various reporting date.
– What does “cash share appreciation rights (SARs)” mean? What is its differrent with usuall share?2- In the part B, the answer is COMPLETELY vague for me! Why we are doing these adjustment at all? We have already credited a of 770,400. why we continue these stuff? What is that “intrisnic value”? why we are deducting (428*50% * 200 * 12) ? where is that “50%” come from ?!!
Excuse me if I am asking too many questions about this! (There is somehow a similar question in this post about this question : https://opentuition.com/topic/ifrs-2-share-appreciation-rights/ but that also does not help me 🙁 )As always THANKS 😉
“What does “cash share appreciation rights (SARs)” mean? What is its differrent with usuall share?” Are you sure that you have copied this correctly? I presume that the obligation when settled will be settled in cash rather than by the issue of shares and the amount payable will be based on the amount by which the underlying share price has risen since the grant was made
I don’t have a copy of the Kaplan book so I’m batting blind-folded!
50%? see my post above on this thread where I postulate that it’s brought forward from the end of the second year of a 4 year vesting period.
Intrinsic value? Very simply it’s the fair value of the shares less the exercise price
Hello & thanks with your help.
“What does “cash share appreciation rights (SARs)” mean? What is its differrent with usuall share?” —> I have not copied it! It is just MY questions not kaplan. I don’t understand the meaning of SAR. all I did understand is that we measure our liability each year by:
Nubmer of employees * number of shares * fair value of SARs !!Well, I think it is very hard to answer this because you do not have a copy of the book.
Thank you Mike
RegardsShare appreciation rights are rights granted to (for example) employees based on the increase in price / market value of the shares of the company.
I’m sorry, I thought that you were quoting from something that you had read – I hadn’t appreciated that it was a general question relating to the IFRS2 topic
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