On January 1, 2019, Junket Company offered its top management share appreciation right with the following terins

Predetermined price Number of sharesP100 per share 50,000 shares

Service perind

1 years

Exercise date

January 1, 2022

The quoted prices per share are P100, P124, P151 and P151 on January 1, 2019, December 31, 2019, December 31,
2020 and December 31, 2021, respectively. What amount should be cha a result of the share appreciation right?
Charged to compensation expense for 2021 as

A P2,550,000

B. P1,300,000 PR50,000

D. None

On January 1, 1,2019, 20 Kinfolk Company granted its president 50,000 share appreciation rights for past services.
These rights are exercisable immediately and expire on December 31, 2020. On exerrise date, the president is
entitled to receive cash for the excess of the share market price over the share market price on the grant date. The
president did not exercise any of the rights during 2019. The market price of the share was P100 on January 1, 2019
and P115 on December 31, 2019. The grantee exercised the rights on December 31, 2020 when the market price was
P110. Result of the share appreciation rights, what amount should be recognized as gain on reversal of share
appreciation rights in 2020?

A. P750,000

R. P500,000 C. P250.000

D. None
Antonia Company grants 1510 share options to each of its 500 employees on January 2, 2019 and exercisable
starting December 31, 2022 for a 2-year period. Each grant is conditional upon the employee working for the entity
over the next three years. Antonia estimates that the fair value of each option is P40. On the basis of weighted
average probability, the entity estimates that 20% of the employees will leave during the three-year period and
forfeit their rights to the share options. During the year 2019, 20 employees left, and Antonia Company still believes
that 20% is a fair estimate of employee departures. During 2020, a further 22 employees left. Due to the low turn-
over as of December 31, 2020, Antonia revises its estimates of employee departures over the three-year period from
20% to 15%. During 2021, a further 18 employees left. What is the compensation expense to he recognized by
Antonia Company for the the share options in 2021?

A. P800,000 B. P900.000

CP940000

D. P1,700,000

In connection with the share option for the benefit of the key employees, Hairy Company intends to distribute
treasury shares when the options are exercised. These shares were bought in 2016 at P42 per share. On January 1,
2019, Hairy granted stack options for 10,000 shares at P38 per share as additional compensation for services to be
rendered over the next three years. The options are exercisable during a four-year period beginning January 1. 2022,
by grantees still employed by the company. Market price of Hairy’s stock wan 147 per share at the date of grant. No
stock options were terminated during 2019. What amount should be reported as compensation expense pertaining to
the option in Hairy’s December 31, 2019 income statement?

A None

BP30.000

CP40,000

D. P90.000

On January 1, 2019, PC Company grants to an employee the right to choose either 10,000 shares, ie. A right to a
cash payment equal to the value of 10,000 shares, or 12,000 shares. The grant is conditional upon the employee
remaining in the company’s employ for 3 years. If the employee chooses the share alternative, the shares must be
held for 3 years after vesting date. On January 1. 2019, the company’s share price is P50. At the end of the years
2019, 2020 and 2021, the share price is P52, P56 and P62, respectively. After taking into account the post-vesting
transfer restrictions, the grant date fair value of the share alternative is P49. The company’s shares have a nominal
value of P10
Question 1: What is the total amount of expense should the company recognize in 20197

A P173,333 BP202666

B. P229,333

P276,000

Question 2: What is the tistal amount of expense should the company recognize in 20207

A P173,333

1202,666

CP229,333

C. P276,000

Question 3: What is the value of the cash alternative as of December 31, 20207

A None

B. P200,000 P171333

1560,000

Executives on condition On January 1. 2019, Color Company granted 80,000 cash shares appreciation rights to the
that the executives remain in its employ for the next three years. The entity estimates that the fair value of the share
appreciation rights at the end of each year in which a liability exists are as follows:
Year 2018

2019 2020

Plan is to be

Fair Value

P15

P18

P20

Compensation expense relating to the pla

Recorded over a three-year period beginning January 1. 2019.

What amount of compensation expense should Color Company recognize for the year ended December 31,20207

A None

BP400.000 CP560000

D. P960,000

Which of the following transactions involving the hauance of shares does not come within the definition of a “share
based” payment under PFRS 2?

A Employee share purchase plans Employee share option plans

B. C Share-based payment relating to an acquisition of a subsidiary

These are transactions in which the entity receives goods or serv

Entity, including shares and share options.

B. Cash settled share-hased payment transactions

A. Equity settled share-based payment transactions

Ax consideration for equity instruments of the

B. Equity payment transactions

C. Cash payment transactions

What is the date on which the fair value of the equity instrument granted is measured?

A. Measurement date

B. Grant date

C. Exercise date

D. End of reporting period

A Asset-settled share-based payment transaction Equity-settled share-based payment transaction

D. Cash-settled share-based payment transaction D. Liability settled share-based payment transaction

1. The services received shall be measured at the fair value of the employees’ services.

II. Fair value shall he measured at the date the options vest

A. Tonly

8. II unly

B. Both Land II

C. Neither I nor

It is the difference between the fair value of the shares to which the counterparty has the right to subscribe
and the price the counterparty is required

A Fair value

I to pay for those shares 1. Intrinsic value

D. Market value

E. Book value

It is the date on which the entity and another party agree to a share-based payment arrangement, heing
when the entity and the counterparty have a shared understanding of the terms and conditions of the
arrangement.

A. Grant date

II. Measurement date

B. Exercise date

C. End of reparting period

For transactions with employees and others providing similar services, the fair value of the equity
instrument granted is measured on

A. Exercise date

B. Grant date
C. End of reporting period

D. Beginning of the year of grant

It is a contract that gives the holder the right, but not the obligation, to subscribe to the entity’s shares at a
fixed or determinable price for a specified period of time.

A Share option

B. Share warrant

D. Share appreciation right

E. Share split

1. These are transactions in which the entity acquires goodi or services by incurring labilities to
the supplier of those goods or services for amounts that are based on the price of the entity’s
shares and other equity instruments.

A. Equity transactions B. Cash payment transactions

A. A current asset

A noncurrent asset

B. Purchase transactions

C. Cash settled share-based payment transactions

A cash-settled share-based payment transaction shall give rise to an increase in

C Equity

D. A liability

1. For cash settled share-based payment transactions, an entity shall measure the goods or
services received and the Dability incurred at the

A Fair value of the goods and services received

IL Fair value of the liability

B. Either the fair valur of the goods or services received or the fair value of the liability Neither the fair
value of the goods or services received nor the fair value of the liability
In accordance with PFRS 2, low should an entity recognize the change in the fair value of the liability in
respect of

A cash-settled share-based payment transaction? A. Should not recognize in the financial statements but
disclose in the nates thereto

1. Should recognize in the statement of changes in equity Should recognize in other

Should recognize in profit or inss

Which of the following statements in relation to a cash-settled share based payment transaction is true? 1.
The fair value of the liability shall be remeasured at the end of each reporting period.

II.

The fair value of the liabilit liahility shall be remeasured at the date of settlement.

A only

Ianly

C. Both I and II

D. Neither Inne 1

If share-based payment transaction provides that the employees have the right to choose the settlement
whether

In cash or shares, the entity is deemed to have issued

H. An equity instrument

A. A compound financial instrument

CA liability instrument D. Either an equity instrument or liability instrument