In Relation to Equity Instruments Granted by an Entity Where

question 2

Multiple Choice

In relation to equity instruments granted by an entity where the entity makes modifications to the terms and conditions attaching to the grant:

• A) if the modification occurs during the vesting period, the incremental fair value is recognised immediately.
• B) terms or conditions may not be modified in a manner that is not beneficial to the employee.
• C) where the exercise price of options is modified, the fair value of the options changes.
• D) the incremental fair value is measured as the difference between the fair value of the modified instrument, estimated at the date of modification and that of the original equity instrument, estimated at the date of original granting.

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Definitions:

Overhead Applied

The method of assigning a portion of indirect costs to specific production jobs or departments based on a predetermined rate.

Raw Materials

Basic materials that are used in the manufacturing process to produce finished goods.

Direct Labor

The wages and other compensation paid to workers who are directly involved in the production of goods or the delivery of services.

Job Order Cost Accounting

A cost accounting system in which costs are assigned to specific jobs or batches and is used for custom orders.