Regardless of the form of share-based compensation, the accounting objective is to record compensation expense:
A) as the book value of the compensation expensed over the vesting period.
B) as the fair value of the compensation expensed over the vesting period.
C) as the book value of the compensation expensed at the date of grant.
D) as the fair value of the compensation expensed at the date of grant.

Question

Quizplus · Accepted Answer

The accounting objective for share-based compensation is to record compensation expense as the fair value of the compensation expensed over the vesting period, in accordance with accounting standards such as ASC 718. This method ensures that the company accurately reflects the cost of the compensation in the financial statements, and provides users of the financial statements with relevant and reliable information. The fair value of the compensation is generally determined using a valuation model, such as the Black-Scholes model, and takes into account factors such as the current price of the company's stock, the exercise price of the options or awards, and the expected volatility of the stock price.

Regardless of the Form of Share-Based Compensation, the Accounting Objective