The most important accounting objective for executive stock options is:
A) Measuring and reporting the amount of compensation expense during the service period.
B) Measuring their fair value for balance sheet purposes.
C) To disclose increases or decreases in the stock options held at the end of each accounting period.
D) None of these answer choices is correct.

Question

Quizplus · Accepted Answer

The most important accounting objective for executive stock options is to measure and report the amount of compensation expense during the service period. This ensures that the financial statements accurately reflect the cost of providing the stock options to executives and provides transparency for investors and stakeholders. Measuring their fair value for balance sheet purposes and disclosing changes in the stock options held are also important, but not as critical as accurately reporting the compensation expense during the service period.

The Most Important Accounting Objective for Executive Stock Options Is