(Solution) - On January 2 Year 1 Argy Company s board of directors -(2025 Original AI-Free Solution)

Paper Details

On January 2, Year 1, Argy Company's board of directors granted 12,000 stock options to a select group of senior employees. The requisite service period is three years, with one-third of the options vesting at the end of each calendar year (graded vesting). An option-pricing model was used to calculate a fair value of $5 for each option on the grant date. The company assumes all 12,000 options will vest (i.e., there will be no forfeitures).
Required:
Determine the amount to be recognized as compensation expense in Year 1, Year 2, and Year 3 under
(a) IFRS
(b) U.S. GAAP.
Prepare the necessary journal entries.