PRACTICE QUIZ – SHARE-BASED COMPENSATION (Share options)

On January 1, 2019, Easy Company granted 30,000 share options to

employees.

The share options vest at the end of three years provided the employees

remain in service until then.

The option price is P60 and the share price is also P60 at the date of grant.

The par value of the share is P50.

At the date of grant, the entity concluded that the fair value of the share

options cannot be estimated reliably.

The share options have a life of 6 years. This means that the options can be

exercised within three years after vesting.

All share options vested at the end of three years and no employees left

during the three-year period.

The share prices and the number of share options exercised are set out

below.

Share price Share options exercised at year-end

2019 63

2020 66
 2021 75

2022 88 10,000

2023 100 15,000

2024 90 5,000

Required: Determine the compensation expense for each year from 2019 to

2024 using the intrinsic value method.