Explanation

Under accounting standards (IFRS 2 and ASC 718):

• Share-based compensation is measured at fair value on the grant date
• The expense is recognized over the vesting period (the period during which employees earn the right to the shares)
• For multi-year vesting periods, the total compensation cost is allocated evenly over each year of the vesting period
• This follows the matching principle in accounting

The correct answer is C: measured at the fair value as of the grant date and recognized as an expense over the vesting period. This is the standard accounting treatment for share-based compensation with vesting requirements.