Question

At the end of its fiscal year, December 31, 2020, Cullumber Limited issued 159,000 share appreciation rights to its officers that entitled them to receive cash for the difference between the fair value of its shares and a pre–established price of $10. The fair value fluctuated as follows: December 31, 2021, $13; December 31, 2022, $9; December 31, 2023, $19; and December 31, 2024, $17. An options pricing model determined that the fair value of all 159,000 SARs fluctuated as follows: December 31, 2021, $657,000; December 31, 2022, $0; December 31, 2023, $1,481,000; and December 31, 2024, $1,113,000. The required service period is four years, and the exercise period is three years from the end of the service period. The company recognizes the SARs in its financial statements. Assume that Cullumber follows IFRS.

Prepare a schedule that shows the amount of compensation expense that is allocable to each year that is affected by the share appreciation rights plan.

Schedule of Compensation Expense - Share Appreciation Rights (159,000) Pre- Cumulative Compensation established Compensation Percentage Accrued to Price Recognizable Accrued Date Fair Date Value 12/31/21 $13 $10 $ % sl 12/31/22 9 10 1% 12/31/23 19 10 1% 12/31/24 17 10 196

Answer 1

Date	Fair Value	Pre-established Price	Cumulative Compensation Recognizable	Percentage Accrued	Compensation Accrued to Date	Expense 2021	Expense 2022	Expense 2023	Expense 2024
12/31/21	13	10	$         477,000.00	25%	$    119,250.00	$ 119,250.00
					$  (119,250.00)
12/31/22	9	10	$                        -	50%	$                   -		$ (119,250.00)
12/31/23	19	10	$      1,431,000.00	75%	$ 1,073,250.00			$ 1,073,250.00
					$      39,750.00				$ 39,750.00
12/31/24	17	10	$      1,113,000.00	100%	$ 1,113,000.00

A4 А B C D E G H J 1 At the end of its fiscal yea 2 Prepare a schedule that sh 3 Schedule of Compensatior 4 Pre-established Price 10 Cumulative Compensation Recognizable =159000*(B6-C6) Expense 2022 Fair Value 13 Expense 2023 Expense 2024 Percentage Accrued 0.25 Expense 2021 =F6 5 Date 6 44561 7 8 44926 9 45291 10 11 45657 12 13 =F7 9 19 10 10 0 =159000"(B9-09) Compensation Accrued to Date =D6*E6 =-F6 =F6+F7 =D9*E9 =F11-F9 =D11 0.5 0.75 =F9 =F10 17 10 =159000"(B11-C11) 1 ge