On October 1, 2016, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Farmer initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in each of the next three years?
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On October 1, 2016, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The
options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the
options are not exercisable unless divisional revenue increases by 5% in three years. Farmer initially estimates
that it is probable the goal will be achieved. How much compensation will be recorded in each of the next three
years?
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