Sample Disclosure – Share Based Employee Compensation Scheme, ESOS (25 November 2009)
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Share-based Employee Compensation Scheme – ESOS
The Company’s Employee Share Options Scheme (“ESOS”) is a share-based, equity-settled employee compensation scheme. The ESOS allows the employees of the Company acquiring the shares of the Company upon fulfilling certain conditions.
The total fair value of share options granted employees is recognised as an employee costs in the income statement with the corresponding increase in the share option reserve in the equity section of the Company over the vesting period of the ESOS taking into account the probability that the ESOS will vest.
The fair value of ESOS is measured at Grant Date, taking into account, if relevant, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable on Vesting Date.
At each balance sheet date, the Company revises its estimates of the number of options that are expected to become exercisable on Vesting Date. It recognises the impact of the revision of the original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium account, or until the option expires, it will be transferred to retained earnings of the Company.
The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.