Question
Please show your calculations in detail so that I can learn how to do this, thanks!
Ferraro, Inc. established a stock appreciation rights (SAR) program on January 1, 2012, which entitles executives to receive cash at the date of exercise for the difference between the market price of the stock and the pre-established price of $22 on 5,240 SARs. The required service period is 2 years. The fair value of the SAR's are determined to be $4 on December 31, 2012, and $11 on December 31, 2013. Compute Perkins' compensation expense for 2012. $ Compute Perkins' compensation expense for 2013. $
Explanation / Answer
2012: (5,240*$4)*50% = $10,480
2013: (5,240*$11) -$10,480 = $47,160