YR FV Expected Departure

YR Instrument FV Time Cum Expense

1 840,000 60 0.33 16,800,000
2 830,000 60 0.67 33,200,000
3 825,000 60 1 49,500,000

J.E 2016 Yr
Renumeration Expenses 16,800,000
Share Base Payment Reserves 16,800,000

2017 Yr
Renumeration Expenses 16,400,000
Share Base Payment Reserves 16,400,000

2018 Yr
Renumeration Expenses 16,300,000
Share Base Payment Reserves 16,300,000
Periodic Expenses
16,800,000
16,400,000
16,300,000

SBPR 49,500,000
SC 8,250,000
SP 41,250,000
Yr Instruments FV Time Cum Expenses
1 42,500 15 0.33 212,500
2 44,000 15 0.67 440,000
3 44,300 15 1 664,500

J.E Yr 1
Renumeration Expenses 212,500
Share Base Payment Reserves 212,500

Yr 2
Renumeration Expenses 227,500
Share Base Payment Reserves 227,500

Yr 3
Renumeration Expenses 224,500
Share Base Payment Reserves 224,500

Question 2

Yr Instruments FV Time Cum Expenses

1 546,000 20 0.33 3,640,000
2 - 20 0.40 -
3 534,000 20 0.60 6,408,000
4 537,000 20 1.00 10,740,000

J.E Yr 1
Renumeration Expenses 3,640,000
Share Base Payment Reserves 3,640,000

Yr 2
Share Base Payment Reserves 3,640,000
Renumeration Expenses 3,640,000

Yr 3
Renumeration Expenses 6,408,000
Share Base Payment Reserves 6,408,000
Yr 4
Renumeration Expenses 4,332,000
Share Base Payment Reserves 4,332,000
Periodic Expenses Question 2
212,500
227,500 Yr Instruments FV Time
224,500 1 10,000 21 0.33
2 - 21 0.67
3 10,000 21 1.00

J.E Yr 1
Renumeration Expenses 70,000
Share Base Payment Reserves 70,000

Yr 2
Share Base Payment Reserves 70,000
Renumeration Expenses 70,000

Yr 1
Renumeration Expenses 210,000
Share Base Payment Reserves 210,000

Periodic Expenses
3,640,000
(3,640,000)
6,408,000
4,332,000
estion 2

Cum Expenses Periodic Expenses

70,000 70,000
- -
210,000 210,000
 Mushtaq Ltd.

Yr Instruments FV Time Cum Expenses

1 41,000 18 0.25 184,500
2 39,000 18 0.50 351,000
3 38,500 18 0.75 519,750
4 37,500 18 1 675,000

J.E Yr 1 Yr 4 (a)
Renumeration Expenses 184,500
Share Base Payment Reserves 184,500

Yr 2 Yr 4 (b)
Renumeration Expenses 168,750
Share Base Payment Reserves 168,750

Yr 3
Renumeration Expenses 168,750
Share Base Payment Reserves 168,750
1
Yr 4 2
Renumeration Expenses 155,250
Share Base Payment Reserves 155,250

Jeremy

Yr Instruments FV Time Cum Expenses

1 10,000 18 0.33 60,000
2 10,000 18 0.67 120,000
3 10,000 18 1.00 180,000

J.E Yr 1
Renumeration Expenses 60,000
Share Base Payment Reserves 60,000

Yr 2
Renumeration Expenses 60,000
Share Base Payment Reserves 60,000

Yr 3
 Renumeration Expenses 60,000
Share Base Payment Reserves 60,000

Yr 3 SBPR 180,000
R.E 180,000
 Q# 13

Periodic Expenses Yr Instruments

184,500 1 90,000
166,500 2 90,000
168,750 3 80,000
155,250

J.E Yr 1
Condition Met Renumeration Expenses
Share Base Payment Reserve 675,000 Share Base Payment Reserves
Share Capital + SP 675,000
Yr 2
Condition Not Met Renumeration Expenses
Share Base Payment Reserve 675,000 Share Base Payment Reserves
Retained Earning/ Equity 675,000
Yr 3
Renumeration Expenses
Share Base Payment Reserves
Market Condition Terms Condition Not Met
Expenses Reverse Nae Hoga Share Base Payment Reserve
Vesting Period aur FV ko DAY 1 pe Lock Karna Retained Earning/ Equity

Q# 1
Yr Instruments
1 80,000
2 80,000
Periodic Expenses 3 80,000
60,000 4 80,000
60,000 5 70,000
60,000
J.E Yr 1-4
Renumeration Expenses
Share Base Payment Reserves

Yr 5
Renumeration Expenses
Share Base Payment Reserves

Yr 6
Renumeration Expenses
Share Base Payment Reserves
 Yr 6
SBPR
sc + sp
 Q# 13 (Vesting Condition Not Met)

FV Time Cum Expenses Periodic Expenses

40 0.33 1,200,000 1,200,000
40 0.67 2,400,000 1,200,000
40 1.00 3,200,000 800,000

1,200,000
1,200,000

1,200,000
1,200,000

800,000
800,000

3,200,000
3,200,000

Q# 14 (Actual VP> Expected VP)

FV Time Cum Expenses Periodic Expenses
25 0.20 400,000 400,000
25 0.40 800,000 400,000
25 0.60 1,200,000 400,000
25 0.80 1,600,000 400,000
25 1.00 1,750,000 150,000

400,000
400,000

150,000
150,000

1,500,000
1,500,000
1,500,000
1,500,000
 Q# 16 Shams Ltd.

Yr Instruments FV Time Cum Expenses

1 1,000,000 180 0.20 36,000,000
2 1,000,000 180 0.40 72,000,000
3 1,000,000 180 0.75 135,000,000
4 1,000,000 180 0.80 144,000,000
5 1,000,000 180 0.83 150,000,000
6 1,000,000 180 1.00 180,000,000

(a) Yr 6 Both Condition Met

6 1,000,000 180 1 180,000,000

Renumeration Expenses 180,000,000

Share Base Payment Reserves 180,000,000

(b) Yr 6 Both Condition Not Met

6 - 180 1 -

Share Base Payment Reserves 180,000,000

Retained Earning 180,000,000

© Non Market Condition Met Market Condition Not Met

6 1,000,000 180 1 180,000,000

Renumeration Expenses 180,000,000

Share Base Payment Reserves 180,000,000

(d) Market Condition Met Non Market Condition Not Met

6 - 180 2 -
Renumeration Expenses (150,000,000)
Share Base Payment Reserves (150,000,000)
Periodic Expenses
36,000,000 Expected Vesting Period is Locked in Msrket Condition So 4 is locked
36,000,000
63,000,000
9,000,000
6,000,000
30,000,000

30,000,000

(150,000,000)

30,000,000

(150,000,000)

Market Condition meet ho yan na Ho Expenses Book Karna

 ICAP Past Paper

Yr Instruments FV Time Cum Expenses Periodic Expenses

1 425,000 38 0.20 3,230,000 3,230,000

Question:
Employee 10 FV ADJ 80
Award 500 Shares

Yr Expected Date Expected Vesting Period

GD 20% 4
1 30% 5
2 20% 5
3 20% 5
4 10% 4

Yr Instruments FV Time Cum Expenses Periodic Expenses

1 3,500 80 0.25 70,000 70,000
2 4,000 80 0.50 160,000 90,000
3 4,000 80 0.75 240,000 80,000
4 4,500 80 1.00 360,000 120,000
Yr Instruments FV Time Cum Expenses
1 40,500 14.40 0.33 194,400
2 40,000 15.50 0.67 413,333
3 25,300 18.20 1.00 460,460
4 11,300 21.40 1 241,820
5 - 25 2 -
Everyone Left

J.E Yr 1
Renumeration Expenses 194,400
Liability 194,400

Yr 2
Renumeration Expenses 218,933
Liability 218,933

Yr 3
Renumeration Expenses 47,127
Liability 47,127

Yr 3
Renumeration Expenses 225,000 Shares at Intrisive Value
Cash 225,000

Yr 4
Liability 218,640
Renumeration Expenses 218,640

Renumeration Expenses 280,000

Cash 280,000

Yr 5
Liability 1
Renumeration Expenses 1

Renumeration Expenses 282,500

Cash 282,500
Periodic Expenses Yr Instruments FV Time Cum Expenses
194,400 1 84,000 80 0.33 2,240,000
218,933 2 - 89 0.67 -
47,127 3 85,000 92 0.75 5,865,000
(218,640) 4 82,500 95 1.00 7,837,500
(241,820)
Periodic Expenses
2,240,000
(2,240,000)
5,865,000
1,972,500
 EWL LTD.

Yr End 30.6.2010 J.E

30.06.2010 Ren Exp 2,880,000

PL 720,000
S.C 3,600,000

30.06.2010 Ren Exp 960,000

SBPR 960,000

30.07.2010 Ren Exp 960,000

SBPR 960,000

SBPR 600,000
SC 600,000

1.06.2010 1000 Shares option

600 Emp

Last Date To Ex Option 31.07.2010

Years Instrument FV Time Cum Expenses

30.06.2010 240,000 8 0.50 960,000
31.07.2010 120,000 22 1 2,640,000
Periodic Expenses
960,000
1,680,000
Q2

Yr Inst FV Time C Exp

1 15,000 10 0.50 75,000
2 15,000 10 1.00 150,000

Journal Entries

1 Ren Exp 75,000

SBPR 75,000

2 Ren Exp 75,000

SBPR 75,000

3 SBPR 150,000
SC 150,000
Q3

Instrument
Yr Employee Shares FV Time
1 1,680 500 60 0.33
2 1,660 500 60 0.67
3 1,650 500 60 1

Journal Entries

1 Ren Exp 16,800,000

SBPR 16,800,000

2 Ren Exp 16,400,000

SBPR 16,400,000

3 SBPR 16,300,000
SC 16,300,000

Q4

Instrument
Yr Employee Shares FV Time
1 405 100 15 0.33
2 418 100 15 0.67
3 443 100 15 1
 Journal Entries

1 Ren Exp 202,500

SBPR 202,500

2 Ren Exp 215,500

SBPR 215,500

3 SBPR 246,500
SC 246,500

Q5

Instrument
Yr Employee Shares FV Time
1 910 600 20 0.33
2 915 - 20 0.40
3 890 600 20 0.60
4 895 600 20 1.00

Journal Entries

1 Ren Exp 3,640,000

SBPR 3,640,000

2 SBPR (3,640,000)
Ren Exp (3,640,000)

3 Ren Exp 6,408,000

SBPR 6,408,000

4 Ren Exp 4,332,000

SBPR 4,332,000

5 SBPR 10,740,000
SC 10,740,000

Q9

Instrument
Yr Employee Shares FV Time
1 440 100 30 0.50
 2 447 100 30 0.67
3 419 100 30 1.00

Journal Entries

1 Ren Exp 660,000

SBPR 660,000

2 Ren Exp 234,000

SBPR 234,000

3 Ren Exp 363,000

SBPR 363,000

5 SBPR 1,257,000
SC 1,257,000

Q 11

Instrument
Yr Employee Shares FV Time
1 82 500 18 0.25
2 78 500 18 0.50
3 77 500 18 0.75
4 75 500 18 1.00

Journal Entries

1 Ren Exp 184,500

SBPR 184,500

2 Ren Exp 166,500

SBPR 166,500

3 Ren Exp 168,750

SBPR 168,750

5 SBPR 155,250
SC 155,250

Q 13
 Instrument
Yr Employee Shares FV Time
1 9 10,000 40 0.33
2 9 10,000 40 0.67
3 8 10,000 40 1.00

Journal Entries

1 Ren Exp 1,200,000

SBPR 1,200,000

2 Ren Exp 1,200,000

SBPR 1,200,000

3 Ren Exp 800,000

SBPR 800,000

Q 14

Instrument
Yr Employee Shares FV Time
1 8 10,000 25 0.20
2 8 10,000 25 0.40
3 8 10,000 25 0.60
4 8 10,000 25 0.80
5 7 10,000 25 1.00
6 6 10,000 25 1.00

Journal Entries

1 Ren Exp 400,000

SBPR 400,000

2 Ren Exp 400,000

SBPR 400,000

3 Ren Exp 400,000

SBPR 400,000

4 Ren Exp 400,000

SBPR 400,000

5 SBPR 250,000
 RE 250,000

6 SBPR 1,500,000
Equity 1,500,000

Q 17

Instrument
Yr Employee Shares FV Time
1 1 100 20 0.10
2 1 100 20 0.20
3 1 100 20 0.30
4 1 100 20 0.40
5 1 100 20 0.50
6 1 100 20 0.60
7 1 100 20 0.70
8 1 100 20 0.80
9 1 100 20 0.90
10 1 100 20 1.00

Journal Entries

A SBPR 2,000
Equity 2,000

B SBPR 2,000 Reversal

R.E 2,000

C SBPR 2,000 Reversal

R.E 2,000

D SBPR 1,000
Equity 1,000

SBPR 1,000
RE 1,000

Q 18
 Instrument
Yr Employee Shares FV Time
1 38 100,000 2 0.33
2 38 100,000 2 0.67
3 38 100,000 2 1.00

Journal Entries

1 Ren Exp 2,500,000

SBPR 2,500,000

2 Ren Exp 2,500,000

SBPR 2,500,000

3 Ren Exp 2,500,000

SBPR 2,500,000

Q 19

Instrument
Yr Employee Shares FV Time
1 1 1,000 45 0.33
2 1 1,000 45 0.67
3 1 1,000 45 1.00

Journal Entries
a
a/b 1 Ren Exp 15,000
SBPR 15,000

2 Ren Exp 15,000

SBPR 15,000 b

3 Ren Exp 15,000

SBPR 15,000
Q 26

Instrument
Yr Employee Shares FV Time
1 240 100 10 0.33
2 250 100 12 0.67
3 260 100 15 1.00

Journal Entries

a/b 1 Ren Exp 80,000

Liability 80,000

2 Ren Exp 120,000

Liability 120,000

3 Ren Exp 190,000

Liability 190,000

Q 28

Instrument
Yr Employee Shares FV Time
1 20 10 2.20 0.33
2 20 10 1.80 0.67
3 20 10 2.40 1.00

Journal Entries

a/b 1 Ren Exp 147

Liability 147

2 Ren Exp 93
Liability 93

3 Ren Exp 240

Liability 240
Q 29

Instrument
Yr Employee Shares FV Time
1 500 - 14.40 0.33
2 500 100 15.50 0.67
3 350 100 18.20 1.00
4 200 100 21.40 1.00
5 - 100 25.00 1.00

Journal Entries

a/b 1 Ren Exp -

Liability -

2 Ren Exp 516,667

Liability 516,667

3 Ren Exp 120,333

Liability 120,333

3 Liability 273,000 216,000

Cash 273,000
225,000
4 Ren Exp (209,000) 15,000
Liability (209,000) 15

4 Liability 321,000
Cash 321,000

4 Liability 500,000
Cash 500,000

Q 34
Rs
FV of Share Settle 57,600 Higher
FV of Cash Settle 50,000
SBPR 7,600
 Instrument Liability
Yr Employee Shares FV Time
1 1 1,000 52 0.33
2 1 1,000 55 0.67
3 1 1,000 60 1.00

Journal Entries

a 1 Ren Exp 19,867

SBPR 2,533
Liability 17,333 Yr
1
2 Ren Exp 21,867 2
SBPR 2,533 3
Liability 19,333

3 Ren Exp 25,867

SBPR 2,533
Liability 23,333

Cash Set 4 Liability 60,000

Cash 60,000

SBPR 7,600
RE 7,600

Equity Settle Liability 60,000

Equity 60,000

SBPR 7,600
RE 7,600

Q 36
Rs
FV of Share Settle 13,500,000 Higher
FV of Cash Settle 11,600,000
SBPR 1,900,000

Instrument Liability
 Yr Employee Shares FV Time
1 1 80,000 150 0.33
2 1 80,000 156 0.67
3 1 80,000 165 1.00
4 1 80,000 175 1.00

Journal Entries

a 1 Ren Exp 4,633,333

SBPR 633,333
Liability 4,000,000

2 Ren Exp 4,953,333

SBPR 633,333
Liability 4,320,000

3 Ren Exp 5,513,333

SBPR 633,333
Liability 4,880,000

Equity S 4 Liability 13,200,000

PL 4,300,000
Share Capital 1,000,000
Share Premiume 16,500,000

SBPR 1,900,000
RE 1,900,000

Q 37

Instrument
Yr Employee Shares FV Time
 1 500 - 14.40 0.33
2 500 100 15.50 0.67
3 350 100 18.20 1.00
4 200 100 21.40 1.00
5 - 100 25.00 1.00

Journal Entries

1 Land 230,000,000
SBPR 20,000,000
Liability 210,000,000

2 Liability 7,000,000
PL 7,000,000

Q 36
Rs
FV of Share Settle 8,800,000 Higher
FV of Cash Settle 8,000,000
SBPR 800,000

Instrument Liability
Yr Employee Shares FV Time
1 1 64,000 130 0.33
2 1 64,000 138 0.67
3 1 64,000 150 1.00

Journal Entries

a 1 Ren Exp 3,040,000

SBPR 266,667
Liability 2,773,333

2 Ren Exp 3,381,333

SBPR 266,667
Liability 3,114,667
 3 Ren Exp 3,978,667
SBPR 266,667
Liability 3,712,000

Equity 4 Liability 9,600,000

PL 2,400,000
SC + SP 12,000,000

SBPR 800,000
RE 800,000

Cash 4 Liability 9,600,000

Cash 9,600,000

SBPR 800,000
RE 800,000

Q 43
Instrument
Yr Employee Shares FV Time
2,004 20 1,000 20.00 0.25
2,005 20 1,000 20.00 0.50
2,006 20 1,000 20.00 0.75
2,007 20 1,000 20.00 1.00

Instrument
Yr Employee Shares FV Time
2,005 20 1,000 9.00 0.13
2,006 20 1,000 9.00 0.38
2,007 20 1,000 9.00 0.63

2,006 20 1,000 9.00 0.60

Journal Entries

2,004 Ren Expe 100,000

SBPR 100,000
2,005 Ren Expe 122,500
SBPR 122,500

2,006 Ren Expe 145,000

SBPR 145,000

2,006 Ren Expe 167,500

SBPR 167,500
P Exp
75,000
75,000

Cumulative Expenses Periodic Expenses

16,800,000 16,800,000
33,200,000 16,400,000
49,500,000 16,300,000

Cumulative Expenses Periodic Expenses

202,500 202,500
418,000 215,500
664,500 246,500
 60

Cumulative Expenses Periodic Expenses

3,640,000 3,640,000
- (3,640,000)
6,408,000 6,408,000
10,740,000 4,332,000

Cumulative Expenses Periodic Expenses

660,000 660,000
 894,000 234,000
1,257,000 363,000

30

Cumulative Expenses Periodic Expenses

184,500 184,500
351,000 166,500
519,750 168,750
675,000 155,250

If Met
SBPR 675,000
Equity 675,000

If Not Met
SBPR 675,000
R.E 675,000
Cumulative Expenses Periodic Expenses
1,200,000 1,200,000
2,400,000 1,200,000
3,200,000 800,000

If Met
SBPR 3,200,000
Equity 3,200,000

Cumulative Expenses Periodic Expenses

400,000 400,000
800,000 400,000
1,200,000 400,000
1,600,000 400,000
1,750,000 150,000
1,500,000 (250,000)

If Met
SBPR 1,750,000
Equity 1,750,000

0.25
Cumulative Expenses Periodic Expenses
200 200
400 200
600 200
800 200
1,000 200
1,200 200
1,400 200
1,600 200
1,800 200
2,000 200

If Met
SBPR 1,000
Equity 1,000
Cumulative Expenses Periodic Expenses
2,500,000 2,500,000
5,000,000 2,500,000
7,500,000 2,500,000

If Met
SBPR 7,500,000
Equity 7,500,000

Cumulative Expenses Periodic Expenses

15,000 15,000
30,000 15,000
45,000 15,000

If Met in Future
SBPR 45,000
Equity 45,000

If Met before expected

SBPR 45,000
Equity 45,000

Expenses will be booked as per expected period

Cumulative Expenses Periodic Expenses
80,000 80,000
200,000 120,000
390,000 190,000

Liability 390,000
Cash 390,000

Cumulative Expenses Periodic Expenses

147 147
240 93
480 240

Liability 480
Cash 480
Cumulative Expenses Periodic Expenses
- -
516,667 516,667
637,000 120,333
428,000 (209,000)
- (428,000)

Liability 637,000
Cash 637,000
Cumulative Expenses Periodic Expenses
17,333 17,333
36,667 19,333
60,000 23,333

Equity
Instrument
Employee Shares Time Cumulative Expenses
7,600 0.33 2,533
7,600 0.67 5,067
7,600 1.00 7,600

Instrument
Cumulative Expenses Periodic Expenses Yr
4,000,000 4,000,000 1
8,320,000 4,320,000 2
13,200,000 4,880,000 3
14,000,000 800,000

2,400,000

Cumulative Expenses Periodic Expenses

 - -
516,667 516,667
637,000 120,333
428,000 (209,000)
- (428,000)

Instrument
Cumulative Expenses Periodic Expenses Yr
2,773,333 2,773,333 1
5,888,000 3,114,667 2
9,600,000 3,712,000 3
Cumulative Expenses Periodic Expenses
100,000 100,000
200,000 100,000
300,000 100,000
400,000 100,000

Cumulative Expenses Periodic Expenses

22,500 22,500
67,500 45,000
112,500 67,500

108,000 s
 Periodic Expenses
2,533
2,533
2,533

Equity
Instrument
Employee Time Cumulative Periodic Expenses
1,900,000 0.33 633,333 633,333
1,900,000 0.67 1,266,667 633,333
1,900,000 1.00 1,900,000 633,333
 Equity
Instrument
Employee Time Cumulative Periodic Expenses
800,000 0.33 266,667 266,667
800,000 0.67 533,333 266,667
800,000 1.00 800,000 266,667
 EWL

Instrument
Yr Employee Shares FV Time Cumulative Expenses
June 2010 240 1,000 30.00 1.00 7,200,000
July 2010 120 1,000 30.00 1.00 3,600,000

Journal Entries

30 June 2010 Renumeration Expenses 18,000,000

SBPR 18,000,000

30 June 2010 SBPR 10,800,000

Share Capital 3,600,000
Share Premiume 7,200,000

30 July 2010 SBPR 3,600,000

Share Capital 1,200,000
Share Premiume 2,400,000

Left Out 20% SBPR 3,600,000

RE 3,600,000
Periodic Expenses
7,200,000
(3,600,000)
 To Do

Q 39
72