The IASB standard on stock options (IFRS 2) is substantially the same as U.S. GAAP. How should stock options be accounted for?
A. Since their value is not determinable until a future date, they are not recorded, but only disclosed in the notes to the financial statements.
B. A compensation expense is recorded based on the value of the options expected to vest as of the date the options are granted.
C. An expense is recorded only if a market value for the options exists on the date the options are granted.
D. The options are recorded as a liability for the value of the stock at the exercise date.
Answer:B
The IASB standard on stock options (IFRS 2) is substantially the same as U.S. GAAP. How should stock options be accounted for?
A. Since their value is not determinable until a future date, they are not recorded, but only disclosed in the notes to the financial statements. B. A compensation expense is recorded based on the value of the options expected to vest as of the date the options are granted. C. An expense is recorded only if a market value for the options exists on the date the options are granted. D. The options are recorded as a liability for the value of the stock at the exercise date.