What are the major recommendations of SFAS No. 123(R), “Share-Based Payment”? (b

Question

What are the major recommendations of SFAS No. 123(R), “Share-Based Payment”?
(b) How do the provisions of SFAS No. 123(R) differ from the bill introduced by members of Congress
(Dreier and Eshoo), which would require expensing for options issued to only the top five officers
in a company? Which approach do you think would result in more useful information? (Focus on
comparability.)
(c) The bill in Congress urges the FASB to develop a rule that preserves “the ability of companies to use
this innovative tool to attract talented employees.” Write a response to these Congress-people explaining
the importance of neutrality in financial accounting and reporting.

Explanation / Answer

The FASB sets out to improve guidelines to resolve issues in a timely manner.

Neutrality in accounting are standards designed to provide the best possible information for economic decision making without being biased.

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