*see attached problemREQUIRED:What amount of compensation expense should be recognized for 2020? On Jan. 1, 2020, Terra Company established a share appreciation rights plan for the executives.The plan entitled them to receive cash at any time during the next four years for the differencebetween the market price of the ordinary share and a pre-established price of Php20 onPhp60,000 share appreciation rights or SARS.On Dec. 31, 2022, 20,000 SARS are exercised by executives.Market PriceJan. 1, 202025 per share28 per shareDec. 31, 2020Dec. 31, 202135 per shareDec. 31, 202230 per share

Stock appreciation rights (SARs) are a device used by companies for compensating their employee.…

Answered: amount of compensation

Business

Accounting

amount of compensation

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 23E

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Question

*see attached problem

REQUIRED:

What amount of compensation expense should be recognized for 2020?

On Jan. 1, 2020, Terra Company established a share appreciation rights plan for the executives.
The plan entitled them to receive cash at any time during the next four years for the difference
between the market price of the ordinary share and a pre-established price of Php20 on
Php60,000 share appreciation rights or SARS.
On Dec. 31, 2022, 20,000 SARS are exercised by executives.
Market Price
Jan. 1, 2020
25 per share
28 per share
Dec. 31, 2020
Dec. 31, 2021
35 per share
Dec. 31, 2022
30 per share

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