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Company Crux grants share options to its employees at 1.1 .XI. Each employee will receive ten options if he/she stays with the company for the next three years. At grant date, the turnover percentage of employees is estimated at 20 per cent. The fair value of the option at grant date is €20. The company grants these options to the 100 employees in service at grant date.
During the first year four employees leave and the company revises its estimate on employee turnover from 20 per cent to 15 per cent (= 15 employees leaving). During year 2 another four employees leave, the entity revises the estimate to 12 per cent. At the end of the third year, six employees leave the company. The share options of the remaining employees vest at the end of year 3.
Calculate the remuneration expense for years 1, 2 and 3 following from this share option plan. What is the credit side when this expense is recorded in the books of the company?