23. The measurement and reporting of stock options as an expense was one of the

Question

23. The measurement and reporting of stock options as an expense was one of the most politically debated topics since the inception of the CAP, APB, and FASB. The end result is that

A. there is no recognition of an expense until the stock options are exercised

B. there is only recognition of expense for stock options that have not been exercised and expired

C. there is recognition of expense only for stock options exercised in the same year they are granted

D. there is recognition of expense for stock options in the year they are granted       

Explanation / Answer

THE END RESULT ON TOPIC "MEASUREMENT AND REPORTING OF STOCK OPTIONS AS EXPENSES" IS THAT THERE IS ONLY RECOGNITION OF EXPENSES FOR STOCK OPTIONS THAT HAVE BEEN EXERCISED AND EXPIRED.

BECAUSE WE CAN'T RECORD AN EXPENSES ON A EASTIMETED BASIS, AS WE DON'T KNOW HOW MUCH OF STOCK OPTIONS WILL BE EXERCISED IN FUTURE, SO WHEN ACTUALY THE STOCK OPTIONS ARE EXERCISED OR EXPIRED WE WILL RECORD IT IN THE INCOME STATEMENT.

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