Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
1st Edition
ISBN: 9780134047430
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 19.4Q
When accounting for employee stock options, will a reduction of compensation expense or compensation “income” occur in future periods?
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Which compensation is generally paid currently?
Multiple Choice
Salary and bonus.
Salary and benefits.
Benefits and bonus.
Bonus and stock options.
Stock options and salary.
How would you explain what Employee Stock Options are? What are their benefits for a company and its employees?
Which of the following is NOT a characteristic of a non-compensatory employee stock option plan (ESOP)?
a.
The plan requires the employee to pay an upfront premium.
b.
There is only a small discount from the market price.
c.
The plan is generally available to all employees.
d.
The plan is accounted for as compensation expense.
Clear my choice
Chapter 19 Solutions
Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Prob. 19.3ECh. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 1FSACCh. 19 - Prob. 2FSACCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Prob. 3SSCCh. 19 - Prob. 4SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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- in estimating annual pension expenses, which of the following factors would not be taken into consideration: current finanical conditions of the company, expected rate of return to e earned on pension fund assets, employee turnover ratesarrow_forwardExplain how “at-the-money” stock options (i.e., options that have no intrinsic value) which are part of an executive compensation package results in compensation expense.arrow_forwardCompensatory stock option plans are a common component of employee compensation packages, allowing employees to purchase company stock at a predetermined price. The financial accounting for such plans involves various considerations. Let's examine a set of statements related to compensatory stock option plans and identify which statement does not accurately reflect the financial accounting principles associated with these plans. Question: Which of the following statements regarding the financial accounting for compensatory stock option plans is not accurate? Multiple Choice A) Stock options' fair value is recognized as compensation expense over the vesting period. B) The common stock issued upon the exercise of stock options is recorded at its fair market value. C) Changes in the market value of stock options during the vesting period do not impact the recorded compensation expense. D) The par value of common stock issued upon the conversion of options increases total owners' equity.arrow_forward
- Where can authoritative IFRS be found related to dilutive securities, stock-based compensation, and earnings per share?arrow_forwardWhich of the following does not affect the measurement of the defined benefit obligation?A. Changes in the market rate of high quality corporate bondsB. Changes in expected contributions to the fundC. Employee turnover rate, mortality and health conditionD. Expected changes in salary levelsarrow_forwardStatement 1: In the case of stock options, the amount of compensation shall be the FMV of the stock options at the time of the exercise of such option. Statement 2: Upon the exercise of the stock option, additional income shall be subject to regular tax if exercised by a managerial employee. Which statement/s is/are correct? a.Statement 2 b.Both statements c.Statement 1 d. neither statementarrow_forward
- Which of the following is a characteristic of the accumulated benefit obligation measurement? Group of answer choices It considers only vested employees. It considers only current employees. It does not use projected future salary levels. It is required by GAAP for measurement of the pension obligation.arrow_forwardCompensation expense resulting from a compensatory stock option plan is generally O allocated to the periods benefited by the employee's required service. O recognized in the period of exercise. O allocated to the periods from the grant date until the employee's expected retirement date. O recognized in the period of the grant.arrow_forwardA statement of comprehensive income for a company with a defined benefit pension plan does not include a. net income. b. the return on plan assets. c. gains from the return on assets exceeding expectations. d. losses from changes in estimates regarding the pension obligation.arrow_forward
- parrow_forwardAn increase in OCI related to plan assets occurs when: Select one: a. The accumulated benefit obligation is more than expected. b. The vested benefit obligation is less than expected. c. Retiree benefits paid out are less than expected. d. The return on plan assets is higher than expected. e. The employer contributes an amount greater than it was liable to do.arrow_forwardHow do U.S. GAAP and IFRS differ with regard to reporting gains and losses from changing assumptions usedto measure the pension obligation?arrow_forward
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