First accounts case with EMI share options and considering whether the EMI share options should be recognised in FRS102 s1A accounts.
EMI options granted to employees which are only exercisable when an agreement has been reached to sell the company and the directors advise in writing the options can be exercised.
The options expire 10 years from the date they were granted and termination of employment.
My understanding of the above is that there is a non-market performance condition to be met and no service, performance or market conditions to be met so the options should only be recognised as an expense in the accounts if and when directors advise in writing that options can be exercised.
Does the above sound correct or should the fair value be recognised over a default period, such as, 10 years and reversed at a later date if the options become void?
Also if /when an expense needs to be recongised should this be the fair value of the options of the excess of fair value over the amount the employees will pay?