This note describes the appropriate accounting treatment of share-based payments in accordance with International Financial Reporting Standards with a brief dicussion of the differences in accounting standards for private enterprises. Stock options and restricted stock are specifically discussed with an example for each offer. The implications of vesting conditions, including service conditions, market conditions for execution, and market performance conditions are not detailed. Furthermore, the note ADDRes … Read more »

This note describes the appropriate accounting treatment of share-based payments in accordance with International Financial Reporting Standards with a brief dicussion of the differences in accounting standards for private enterprises. Stock options and restricted stock are specifically discussed with an example for each offer. The implications of vesting conditions, including service conditions, market conditions for execution, and market performance conditions are not detailed. Furthermore, the central importance of accounting concerned compared to Equity settled share-based compensation with cash settlement. A brief discussion of disclosure and income tax considerations is also available. Finally, the background of recent developments backdating of stock option plans and say-on-pay requirements is given.
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Darren Henderson
8 pages.
Release Date: 17 October 2011. Prod #: W11361-PDF-ENG
Note on Accounting for Stock-Based Compensation, HBR case solution