Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans. a. Identify the authoritative literature that addresses the accounting for share-based payment compensation plans. b. Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?
Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans. a. Identify the authoritative literature that addresses the accounting for share-based payment compensation plans. b. Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Richardson Company is contemplating the establishment of a share-based compensation plan to
provide long-run incentives for its top management. However, members of the compensation
committee of the board of directors have voiced some concerns about adopting these plans,
based on news accounts related to a recent accounting standard in this area. They would like you
to conduct some research on this recent standard so they can be better informed about the
accounting for these plans.
a. Identify the authoritative literature that addresses the accounting for share-based payment
compensation plans.
b. Briefly discuss the objectives for the accounting for stock compensation. What is the role
of fair value measurement?
The Richardson Company board is also considering an employee share-purchase plan, but
the Board does not want to record expense related to the plan. What criteria must be met to
avoid recording expense on an employee stock-purchase plan?
с.
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