Pastner Brands Is a Calendar-Year Firm with Operations in Several

Essay

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2013, the company had issued 20 million executive stock options permitting executives to buy 20 million shares of stock for $25. 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: Required:
Determine the compensation expense related to the options to be recorded each year for 2013-2015, assuming Pastner prepares its financial statements in accordance with International Financial Reporting Standards.