CONFUSION:
In following problem every data required are provided except the EXERCISE PRICE. How can we solve problem if exercise price is not available?
QUESTION:
X ltd. offered 15000 ESOP's to it's employees on April 1, 2001. Exercisable on 31st March 2004. On 1st January 2002, 1000 options lapsed. On 31st March 2003, 2000 options lapsed. Remaining options were availed by employees on due date. Market price on 1-4-2001 for equity shares of company is Rs. 40(face value Rs. 10). However, market price on 31-3-2004 is Rs. 80 per share. Journalize entries.
Thank You so much.
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Problem on ESOP
Replies (1)
in your case we can take that company can't issue at fair value.
Company can issue share at par or at premium only.
we can take assumption issue price is Par Value.
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