Open AccessAccounting For Stock Options: Comparison Of Alternative Approaches
Author(s) -
Gerald J. Lobo,
Joseph C. Rue
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v16i3.2040
Subject(s) - accounting , stock options , fair value , measure (data warehouse) , financial accounting , economics , value (mathematics) , business , mark to market accounting , stock market , actuarial science , econometrics , accounting information system , finance , computer science , statistics , mathematics , database , paleontology , horse , biology
The Financial Accounting Standards Board in Standard No. 123 requires the disclosure of the annual option expense assuming a market based static model is used to measure the option "value" at issue data. This study reviews and tests alternative measures of accounting for stock options that were previously proposed by the Board. Our results suggest the exercise date model provides a measure of option expense which more consistently reflexes the changes in the market value of the option.