01 August 2008
Suppose I am following the intrinsic value method of accounting. The market price on grant date is Rs. 50 and the exercise price is Rs. 15 resulting in an intrinsic value of Rs. 35. However, before vesting / before exercise the Company decides to change the exercise price to Rs. 20. How does this chenge affect my accounting? Also, what will be the scenario if the exercise price is now revised to Rs. 60.
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