Accounting for Share-Based Compensation in IFRS

Easy Employee Compensation Share-based Compensation

ABC Corporation grants 1,000 share options to its employees as part of a share-based compensation plan. Each option allows the employee to purchase one share of the company's stock at an exercise price of $10. The options vest after three years but can be exercised anytime during a five-year period starting from the vesting date. ABC Corporation follows IFRS for its financial reporting.

Which of the following statements is true regarding the accounting for these share-based compensation options?

The expense related to the share options will be recognized over the vesting period.

The share options will not be considered an expense since they are only granted, not exercised.

The value of the share options must be recorded at their market price at the time of exercise.

Hint

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