UK Option expense (IFRS treatment)

[K Yip]

Assume we have granted 1,000 options to an employee on Jan 1 2022 at $30@ vesting over 3 years, my understanding is that the option expense should be recorded at $10,000 in 2022, 2023 & 2024. In 2023, company does not perform well and is expected to shut down in 2024. My questions are:
1. Should I continue to record $10,000 in 2023 even if the company is at zero value?
2. If the employee leaves the company on Jun 30 2023, should I record:
a) $5,000 representing the option expense vested from Jan 1 - Jun 30 2023
b) -$10,000 representing the reversal of 2022 option expense

 

[kirby]

1. If the company has no value, then the option is worthless and not worth recording.
2. Here you have to look at both the terms of the option grant agreement to see if it says what happens if the employee leaves and also look at the corporation law in your jurisdiction regarding options to see if there is a law that specifies what happens to options if an employee leaves.