Yellow Company Is a Calendar-Year Firm with Operations in Several

Multiple Choice

Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2013, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $30. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting) . The fair value of the options is estimated as follows: Assuming Yellow prepares its financial statements in accordance with International Financial Reporting Standards, what is the compensation expense related to the options to be recorded in 2014?

A) $40,000.
B) $60,000.
C) $95,000.
D) $130,000.