Employees who have stock options granted the right to acquire shares within a specified period, the company’s shares at a fixed price. The recognition of such Employee Stock Options is a controversial and complex topic for decades. The debate has continued to the present time due to the high visibility of the company executives who have made a fortune under its stock option plans. This note presents the history and the debate about the rules for the share options … Read more »

Employees who have stock options granted the right to acquire shares within a specified period, the company’s shares at a fixed price. The recognition of such Employee Stock Options is a controversial and complex topic for decades. The debate has continued to the present time due to the high visibility of the company executives who have made a fortune under its stock option plans. This note shows the history and the debate on the accounting rules for stock options and provides a simple, instructive example of bookings for fixed stock option grants.
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Mark T. Bradshaw
13 pages.
Publication Date: Oct 11, 2001. Prod #: 102039-PDF-ENG
Accounting for Employee Stock Options HBR case solution

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