FRSIC Consensus 7 – Accounting Treatment For Granting Of ESOS By Parent Company To Subsidiary’s Employees And Subsequent Recharge By The Parent (27 March 2008)

The effective date of the application of this FRSIC CONSENSUS was 27 March 2008.

The release of FRSIC Consensus 7 – Accounting Treatment For Granting Of ESOS By Parent Company To Subsidiary’s Employees And Subsequent Recharge By The Parent provides guidance, on the accounting treatment for transactions where a parent grant rights to its equity instrument to its subsidiary’s employees and recharges the subsidiary for the equity instrument

You can download FRISC Consensus 7 here:

Sample Disclosure – Share Based Employee Compensation Scheme, ESOS (25 November 2009)

Share-based Employee Compensation Scheme – ESOS

The Company’s Employee Share Options Scheme (“ESOS”) is a share-based, equity-settled employee compensation scheme. The ESOS allows the employees of the Company acquiring the shares of the Company upon fulfilling certain conditions.

The total fair value of share options granted employees is recognised as an employee costs in the income statement with the corresponding increase in the share option reserve in the equity section of the Company over the vesting period of the ESOS taking into account the probability that the ESOS will vest.

The fair value of ESOS is measured at Grant Date, taking into account, if relevant, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable on Vesting Date.

At each balance sheet date, the Company revises its estimates of the number of options that are expected to become exercisable on Vesting Date. It recognises the impact of the revision of the original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium account, or until the option expires, it will be transferred to retained earnings of the Company.

The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.

Sample Disclosure – Accounting Policy Of Employee Equity Compensation Benefits (ESOS) (24 November 2009)


The Employees’ Share Option Schemes (“ESOSs”) of the Company and a subsidiary grant the Group’s eligible employees options to subscribe for shares in the Company and the subsidiary at pre-determined subscription prices. These equity compensation benefits are recognised as an expense with a corresponding increase in equity over the vesting period as share option reserve. The total amount to be recognised is determined by reference to the fair value of the share options at grant date and the estimated number of share options expected to vest on vesting date.

Sample Disclosure – Employees’ Share Option Scheme In Directors’ Report (2 September 2009)


No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of options pursuant to the ESOS. The ESOS which became effective on 1 January 1999 is made available to eligible employees of the Group. At an Extraordinary General Meeting held on 31 January 2002, the shareholders of the Company approved the proposed amendments to the Bye-Laws of its existing ESOS. The ESOS have since expired on 1 January 2009 and the options granted under the ESOS have lapsed.

The information with respect to the number of option granted to employees and Directors of the Company under the ESOS during the financial year are as follows:

[——————Option Of RM1.00 each———————]

Exercise price

Balance as at


Balance as at

Date of offer


1 January 2008



31 December 2008

10 January 1999





The Companies Commission of Malaysia had granted an exemption to the Company from having to disclose the name of the eligible employees who have been granted with options during the last financial year and the number of options granted to them in accordance with Section 169 (11)(a) of the Companies Act, 1965 except for eligible employees who have been granted with options to purchase 100,000 and more ordinary shares in last financial year. This information has been separately lodged to the Companies Commission of Malaysia.

Sample Disclosure – Issue Of Shares In Directors’ Report (2 September 2009)


During the financial year, the issued and fully paid-up share capital of the Company was increased from RM10,000,000 to RM11,500,000 by way of issuance of 1,500,000 new ordinary shares of RM1.00 each by virtue of the exercise of the ESOS. The newly issued shares rank pari passu in all respects with the then existing shares of the Company.

There were no issues of debentures during the financial year.