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PFRS 2 Share-based payments

QUIZ:
1. Many shares and most share options are not traded in an active market. Therefore, it is often
difficult to arrive at a fair value of the equity instruments being issued. Which of the following
option valuation techniques should not be used as a measure of fair value in the first instance?
a. Black-Scholes model.
b. Binomial model.
c. Monte-Carlo model.
d. Intrinsic value.
(Adapted)

2. Elizabeth, a public limited company, has granted 100 share appreciation rights to each of its
1,000 employees in January 20X4. The management feels that as of December 31, 20X4, 90% of
the awards will vest on December 31, 20X6. The fair value of each share appreciation right on
December 31, 20X4, is P10. What is the fair value of the liability to be recorded in the financial
statements for the year ended December 31, 20X4?
a. P300,000
b. P10 million
c. P100,000
d. P90,000
(Adapted)

“You have to stay in school. You have to. You have to go to college. You have to get your degree.
Because that's the one thing people can't take away from you is your education. And it is worth the
investment.” - Michelle Obama

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SOLUTION:
2. A (100 × 1000 × 90% × P10 × 1/3)