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Sir on the date of the grant for ESOP. the amount that get debited is the exercise price( the fixed amount to buy the share) or is the Options traded price at the date of the grant( the price to buy the option) .
sir what is the accounting entry when the option get exercised and when it doesnot get exercised. Thank you.You need to work our lecture again.
No double entry on grant date.
Exercise: Dr Cash Dr Option Reserve Cr SC Cr SP
Not exercised : Might be a reserves transfer – but exam doesn’t really worry about reserves.🙂
I got It’s the fair value of the option on the grant date. Sir in the video for cash settled you mentioned about the paying based on the price of the shares however in the example you have given the fair value of options. Can cash settled be based on the fair value of the traded option price?
Sir for furthuer knowledge I would also like to ask you how does a company manages to get stock options for its employees? and what would the accounting entry be.
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