EXERCISE 1

If employees have right to choose the settlement, this creates a compound instruments.
Select one:
True
False

Question 2
Share Options are equity Settled while Share Appreciation Rights are cash settled
Select one:
True
False

Question 3
Share Option creates shareholders’ equity while Share Appreciation Rights creates
liability
Select one:
True
False

Question 4
If employees have the right to choose settlement, the classification of the benefit is
based on the majority settlement.
Select one:
True
False

Question 5
In cash settled benefits, benefits are finalized in the grant date
Select one:
True
False

Question 6
The most important objective of share option is to recognize services rendered
Select one:
True
False

Question 7
If the price of the entity share goes down from that of the grant date, there will be a
deduction of benefits for employees.
Select one:
True
False

Question 8
The intrinsic value is the excess of the market value over the option price
Select one:
True
False

Question 9
Modification of vesting conditions creates no adjustment for compensation expense
Select one:
True
False

Question 10
Any reversal on the conditions will decrease the current compensation expense.
Select one:
True
False

Question 11
If there is an acceleration of vesting, any excess payment over the fair value of the
option will be recognized as an expense.
Select one:
True
False
Question 12
Compensation Expense from a share option will be allocated to the period benefited by
the employee’s required service.
Select one:
True
False

Question 13
Share Option is both a right and an obligation.
Select one:
True
False

Question 14
Intrinsic Method considers changes of shares fair values up to the settlement date.
Select one:
True
False

Question 15
If changes in some variables like employee tenure and performance will definitely
change the compensation.
Select one:
True
False

Question 16
The service received shall be measured at the fair value of employee’s services
Select one:
True
False

Question 17
If the rights vest immediately, total compensation should be recognized.
Select one:
 True
False

Question 18
We just have a liberty to use either Fair Value or Intrinsic value method.
Select one:
True
False

Question 19
Share Appreciation Rights is finally measured at the grand date
Select one:
True
False

Question 20
Fair Value method is mandated by PFRS and compensation is adjusted to changes in
fair value of option.
Select one:
True
False