Download or read book Impact of stock option expensing on small businesses written by United States. Congress. Senate. Committee on Small Business and Entrepreneurship and published by . This book was released on 2004 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Crash Course in Accounting and Financial Statement Analysis written by Matan Feldman and published by John Wiley & Sons. This book was released on 2011-07-20 with total page 294 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seamlessly bridging academic accounting with real-life applications, Crash Course in Accounting and Financial Statement Analysis, Second Edition is the perfect guide to a complete understanding of accounting and financial statement analysis for those with no prior accounting background and those who seek a refresher.
Download or read book Expensing Employee Stock Options written by Norbert J. Michel and published by . This book was released on 2002 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Accounting for Employee Stock Options written by Judith S. Ruud and published by DIANE Publishing. This book was released on 2008-05 with total page 541 pages. Available in PDF, EPUB and Kindle. Book excerpt: In March 2003, the Financial Accounting Standards Board (FASB) began reconsidering the accounting standard for equity-based compensation. The Board released an exposure draft for a revised standard on Mar. 31, 2004. That revised standard would require firms to recognize the fair value of employee stock options (ESO) as an expense, as was first proposed by FASB more than 10 years ago. This paper assesses whether, under the current accounting standard, firms that grant ESO without recognizing an expense overstate their income. Presents the relevant issues, describes the current standard for ESO, compares the intrinsic value & fair value methods of measure., & weighs the potential economic effects of revising the standard. Ill.
Download or read book IFRS 2 written by International Accounting Standards Board and published by . This book was released on 2004 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Early Adoption of Stock Option Compensation Expense written by Petro Lisowsky and published by . This book was released on 2008 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the likelihood of firms adopting the fair value based method of accounting for stock option compensation cost in 2002 and 2003. To examine this issue, I use two matched sample methodologies: (1) a size and book-to-market matching method typically employed in empirical accounting and finance research; and (2) a Propensity Score matching method typically used in the life sciences. I create a profile of firms that elected to expense employee stock option compensation when it was not yet required by Statement on Financial Standards No. 123 (Revised): Share-Based Payment (SFAS 123(R)). I find support for the general hypothesis that increasing switching costs from disclosure to recognition lowers the likelihood for stock option expense adoption in 2002 and 2003. More specifically, the likelihood of expensing stock options decreases when the magnitude of (implied) stock option expense increases and the value of options awarded to the firm's executives increases in relation to their total compensation. I find that the likelihood of expensing stock options increases when the interest coverage ratio increases and when the number of options awarded to the firm's executives increases in relation to the number of stock options awarded to all employees. I also find weak evidence that the likelihood of expensing is highest in the healthcare industry. Although these results hold under both matched sample approaches, the Propensity Score approach helps to prevent misleading statistical inference by reducing the bias inherent in traditional size and book-to-market matched sampling.
Download or read book Valuing Employee Stock Options written by Johnathan Mun and published by John Wiley & Sons. This book was released on 2004-10-13 with total page 335 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to understanding the implications andapplications of valuing employee stock options in light of the newFAS 123 requirements Due to the new requirements of the Proposed Statement of FinancialAccounting Standards (FAS 123) released by the Financial AccountingStandards Board (FASB)-namely the fact that employee servicesreceived in exchange for equity instruments be recognized infinancial statements-companies are now scrambling to learn how tovalue and expense employee stock options (ESOs). Based on authorDr. Johnathan Mun's consulting and advisory work with the FASBconsulting projects with several Fortune 500 firms, ValuingEmployee Stock Options provides readers with a comprehensive lookat this complex issue. Filled with valuable information on binomial lattice andclosed-form modeling techniques, Valuing Employee Stock Options canhelp financial professionals make informed decisions whenattempting to ascertain the fair-market value of ESOs under the newrequirements. Johnathan Mun, PhD, MBA, MS, CFC, FRM (San Francisco, CA), is VicePresident of Analytical Services at Decisioneering, Inc., themakers of Crystal Ball analytical software. He is also the authorof Applied Risk Analysis (0-471-47885-7), Real Options Analysis(0-471-25696-X), and Real Options Analysis Course (0-471-43001-3),all of which are published by Wiley.
Download or read book Stock Option Expensing written by Fabrizio Ferri and published by . This book was released on 2011 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the 2003 and 2004 proxy seasons the Securities Exchange Commission allowed shareholders' proposals to expense employee stock options to be voted upon at the annual meeting. We analyze the determinants of shareholders' votes for a sample of 107 firms. We hypothesize and find that votes for expensing are higher in firms with perceived excessive option compensation and lower expected earnings impact from expensing. Insiders' ownership is positively associated to votes against, while most types of institutional investors tend to vote for expensing. Finally, votes for are higher in larger firms, with higher interest coverage, higher leverage and lower returns.
Download or read book Oversight Hearing on Expensing Stock Options written by United States. Congress. Senate. Committee on Governmental Affairs. Subcommittee on Financial Management, the Budget, and International Security and published by . This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book FASB Proposals on Stock Option Expensing written by United States. Congress. House. Committee on Energy and Commerce. Subcommittee on Commerce, Trade, and Consumer Protection and published by . This book was released on 2004 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Confronting the Issue of Expensing Exployee Stock Options written by Mary Olson and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Stock Options Expensing written by Pamela M. Brandes and published by . This book was released on 2014 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the debate over appropriate compensation disclosure continues, some firms have volunteered to recognize stock option costs within their income statements. On the one hand, stock option expensing can significantly enhance the legitimacy of the organization and restore shareholders' confidence in corporate governance practices. On the other hand, expensing stock options could decrease firm earnings, leading to unfavorable comparisons to non-expensing firms. Our logit analysis of 402 S&P firms lends partial support to agency theory explanations for stock option expensing; these results depend on the costs associated with expensing. We find stronger support for the institutional theory perspective that mimetic pressures significantly increase the likelihood that firms will expense stock options, independent of the cost. Our findings have important governance implications, suggesting a more complex model of compensation disclosure in which social pressures dominate voluntary compensation disclosure decisions.
Download or read book Leveraged ESOPs and Employee Buyouts written by Scott S. Rodrick and published by . This book was released on 2000 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Stock Options written by Barbara Wood and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Until June 2005, firms had a choice in accounting for stock option compensation. The majority of firms elected to disclose option compensation expense in the footnotes of their financial statements. However, after the accounting scandals in the early 2000s, many firms moved from disclosing the expense to recognizing the expense as a charge against earnings. This research examines the reasons that firms would voluntarily elect to adopt option recognition prior to regulatory requirement. The decision to recognize option pay is examined with respect to efficient contracting, earnings management, and information signaling. Firms that elect to expense option pay do so to reduce political costs and potential debt covenant violations. These firms also have greater earnings and lower option costs, reducing the impact of the recognition decision. From an information signaling perspective, firms with greater growth opportunities and greater insider ownership of the firm's stock use their recognition decision to reveal their firm's favorable prospects. Examination of the use of option compensation by firms that voluntarily choose to expense option pay and firms that do not reveals that expensing firms are high quality firms that use option compensation more effectively. The payoff relationship between executive option pay and operating income shows diminishing returns for non-expensing firms and a linear relation for expensing firms, suggesting that non-expensing firms may be over-granting option pay. Additionally, the incentive value of CEO option grants for expensing firms is more closely aligned with shareholder interests than for non-expensing firms. The economic determinants of executive option grants is similar for expensing and non-expensing firms. The residuals from the economic determinants model are used as an explanatory variable in a logistic regression model examining the decision to expense option compensation. Positive residuals indicate the firm grants options in excess of the level predicted by the economics determinants model. Firms over-granting option compensation would be less inclined to increase the transparency of their option program by moving the cost information into the firm's financial statements. The model shows that firms that over-grant executive stock options are less likely to voluntarily recognize option pay.
Download or read book Accounting and Management Considerations Relative to Stock Options written by Dwight Vincent Call and published by . This book was released on 1966 with total page 438 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book IMPACT OF STOCK OPTION EXPENSING ON SMALL HEARING S HRG 108 612 COMMITTEE ON SMALL BUSINESS AND UNITED STATES SENATE 108TH C written by United States. Congress. Senate. Committee on Small Business and published by . This book was released on 2005* with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Accounting for Stock Options written by Nicole Marciano and published by . This book was released on 2004 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt: The task of accounting for equity compensation has never been more controversial and complex than it is today. There exists a viewpoint that one reason for current business scandals was the use of equity compensation arrangements. These arrangements gave companies the ability to issue executive stock options with no financial statement impact. In response to these issues, corporate practices are changing. Stock options are an important component of a company's executive compensation program. Stock options are a significant cost for corporations and an even larger benefit to executives. That is partly the reason why corporations fight to avoid making a charge for stock options against earnings. When a corporation gives something of value to its employees, in return for their services, it is clearly a compensation expense. Employee stock options are a legitimate expense and are considered the cost of doing business in today's economy. Using traditional accounting methodology, expenses are reported on the entity's income statement. Failure to account for stock options is a disservice to investors and a weakness of America's capital markets. Without consistent valuation rules, it is nearly impossible to compare one company's performance with another. This thesis will discuss the current reasons, methods, and effects of standardized expensing of stock options. This thesis (1) proves the role of the Financial Accounting Standards Board in passing accounting standards is being undermined by current investigations of the Securities and Exchange Commission through analysis of The Securities Exchange Acts of 1933 and 1934 and The Sarbanes-Oxley Act of 2002. (2) proves the necessity of accounting for stock options by examining Intel Corporation's financial statements and note disclosures regarding stock option expensing; (3) describes some of the valuation techniques used to value stock options and explains why these techniques are controversial; (4) predicts the impact of standardized expensing of stock options upon the economy, stockholders, and employees ; and (5) explores in detail the rationale and results of expensing stock options through presentation of comprehensive interpretation of Accounting Principles Board Opinions, Financial Accounting Standards Board Statements, and International Accounting Standards Board Exposure Draft. It is important that the public users of financial statements know the true significance of company performance indicators like earnings per share and net income. In addition, investors need to be aware of the reasons for and against an entity's expensing of stock options on the income statement in order to make informed business decisions. Most of the coverage on this topic via the media, periodicals, newspapers, books, and financial statements themselves are too technical to be used as an adequate source. The importance of this study is to organize, supplement and explain accounting for stock options in a logical manner. Hopefully, as a result, the stockholder, employee, and the business executive will be able to use this study as a source to determine the actual accounting and valuation techniques used, and their implications and ramifications.
