ST granted 1,000 share appreciation rights (SARs) to its 100 employees on 1 December 20X7.

Vendor: CIMA
Product: F2
Update on: Jul 29, 2025
Questions: 268

CIMA F2 Question Answer

ST granted 1,000 share appreciation rights (SARs) to its 100 employees on 1 December 20X7. To be eligible, employees must remain employed for 3 years from the grant date. In the year to 30 November 20X8, 10 staff left and a further 20 were expected to leave over the following two years. The fair value of each SAR was $12 at 1 December 20X7 and $15 at 30 November 20X8.

What is the accounting entry to record this transaction for the year to 30 November 20X8?

Dr Staff costs $350,000, Cr Non-current liabilities $350,000

Dr Staff costs $350,000, Cr Equity $350,000

Dr Staff costs $280,000, Cr Non-current liabilities $280,000

Dr Staff costs $280,000, Cr Equity $280,000