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  3. gordo granted shares options to its employees on 1

Gordo granted shares options to its employees on 1 October x2 as follows:On 30 September...

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Accounting

Gordo granted shares options to its employees on 1 October x2 as follows:

On 30 September X3 - employees could potentially receive 2 million ordinary shares of RM1 each. Estimated 90% of the employees achieved their performance target and were eligible for the shares. The fair value was RM2.

On 30 September x4 - a further 3 million ordinary shares could be vested. The options due to be vested on 30 September x4 relate to the performance of the employees over the period 1 October x2 to 30 September x4. It is hoped that 96% of the employees will achieve their performance targets. The fair value was RM3.


Required:

Explain the effect of the above options in the financial statement of Gordo at 30 September x3 and 30 September x4.

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