Equity-settled award: cumulative expense, expense of the period, reserve and entries: Plan R — chief executive

Context

Cadrane SA (fictitious entity) closes its accounts on 31 December. On 1 January 20X6, it granted an option plan to its managers (plan Q) and an option plan to its chief executive (plan R). You prepare the schedule of the expense from 20X6 to 20X8 and the entries.

Assignment

Expense schedule of the Cadrane plans Q and R

Purpose of the workpaper

Record the grant-date fair value, the expected total cost at the closing date (fair value × number of instruments expected to vest), the elapsed share of the vesting period and the cumulative expense already recognised. Compute the cumulative expense at the closing date, then the expense of the period as the difference from the cumulative expense already recognised: it is negative when the revision of the expected number calls for a reversal. Reconcile the closing reserve with the ledger reserve. The total cost, the elapsed share and the numbers are case data; the grant-date fair value is never revised.

Questions of the file covered by this workpaper

• Plan Q: compute the cumulative expense at 31 December 20X6.
• Plan Q: compute the expense of 20X6.
• Plan Q: compute the cumulative expense at 31 December 20X7.
• Plan Q: compute the expense or reversal of 20X7.
• Plan R: compute the cumulative expense at 31 December 20X6.
• Plan Q: compute the reserve at the end of 20X7 and then at the end of 20X8.

• MemoCompany profile and case conventionsOpen
• ContractRules of plan Q (managers)Open
• ContractRules of plan R (chief executive)Open
• ScheduleManagement estimates and actual resultsOpen
• MemoExercise notice of 20X8Open
• InvoiceRecruitment invoiceOpen