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How is the employee compensation expense amortised in year 1,2,3 in this sum ?? How to find that fraction ??

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anamika vardhan

anamika vardhan

CA Inter

1K+

07-May-20 15:51

22

Answers (2)

In this problem we have been changing vesting period since the target of earning is not met until third year In the year 1 - As the earnings are not achieved, we assume the vesting will happen the next year hence it is divided in the ratio of 1/2 In the year 2 - As the earnings are still not achieved, we assume the vesting might happen in the third year, hence at the end of year 2 we divide it in the ration of 2/3 In the year 3 - Finally earnings are achieved, hence we divide it in the ratio of 3/3


ruchi lahoti

ruchi lahoti

Moderator

07-May-20 17:58

Thank you so much


anamika vardhan

anamika vardhan

CA Inter

1K+

07-May-20 18:22

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