Case 15-11 Accounting for Employee Stock Option Plans (ESOPs) Growth Corporation offered the following stock option plan to its employees: Each employee will receive 1,000 optic stock at an option price equal to the market price of the company's common shares on the grant date, January 1, 20 The market price per share was $22 The fair value of an option was $3 Required: a. Describe how the ESOPS would have been reported under the provisions of APB Opinion No. 25. b. Analyze and explain the consequences of the APB Opinion No. 25 accounting treatment. Your analysis should c i. The conceptual framework ii. Any ethical implications iii. The impact on financial statements iv. The impact on financial ratios c. The FASB now requires companies to use the fair value method of accounting for ESOPs as described in FASB the ESOPS will be reported under this method. d. Analyze and explain the consequences of using fair value to measure and report the ESOPs. Your analysis shou i. The conceptual framework ii. Any ethical implications iii. The impact on financial statements iv. The impact on financial ratios
Case 15-11 Accounting for Employee Stock Option Plans (ESOPs) Growth Corporation offered the following stock option plan to its employees: Each employee will receive 1,000 optic stock at an option price equal to the market price of the company's common shares on the grant date, January 1, 20 The market price per share was $22 The fair value of an option was $3 Required: a. Describe how the ESOPS would have been reported under the provisions of APB Opinion No. 25. b. Analyze and explain the consequences of the APB Opinion No. 25 accounting treatment. Your analysis should c i. The conceptual framework ii. Any ethical implications iii. The impact on financial statements iv. The impact on financial ratios c. The FASB now requires companies to use the fair value method of accounting for ESOPs as described in FASB the ESOPS will be reported under this method. d. Analyze and explain the consequences of using fair value to measure and report the ESOPs. Your analysis shou i. The conceptual framework ii. Any ethical implications iii. The impact on financial statements iv. The impact on financial ratios
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter15: Shareholders’ Equity: Capital Contributions And Distributions
Section: Chapter Questions
Problem 29P
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