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In ESOP,If a question gives the no of employees who left the company on an estimation basis for a year as well as real figures of employees left is given,then which no.of employees(real or estimated) to be considered for the calculation of employee compensation expense?
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Thread Starter
sarvani mustiBut here in this question, though the estimated figures are given, we consider real figures only which is in contrast of the question I sent previously
When you know the actual left on 31st March 2022, you will consider that.
Actually initially when u recognise the employee compensation expenses then u need to do with expected amount but when in a particular year u come to know abt the number of employees are reduced then u consider actual and reverse the addl expense already recognised earlier U need to assume in 1 St year in this way ure unaware of fact of workers will be leaving in 2 nd year so u need to recognise such expense for all employees But in year 2 u need to assume in this way I am unaware of employees leaving in year 1 and i have come to know abt this in year 2 Such that whatever the expense u recognised for such employees earlier u can reverse now
Thanusha Lakshmi
Actually initially when u recognise the employee compensation expenses then u need to do with expected amount but when in a particular year u come to know abt the number of employees are reduced then u consider actual and reverse the addl expense already recognised earlier U need to assume in 1 St year in this way ure unaware of fact of workers will be leaving in 2 nd year so u need to recognise such expense for all employees But in year 2 u need to assume in this way I am unaware of employees leaving in year 1 and i have come to know abt this in year 2 Such that whatever the expense u recognised for such employees earlier u can reverse now
does it mean in the initial years the expense recognised is always on an estimation basis, but in the final yr as we come to know the exact no of employees leaving, we reverse the amt recognised only in that final yr(not till then)?
Thanusha Lakshmi
Yes exactly
But here in this question, though the estimated figures are given, we consider real figures only which is in contrast of the question I sent previously
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