Accounting for nonqualified stock option plans results in all of the following except:

Multiple Choice

• Nonqualified stock option accounting results in a temporary tax difference.

• Nonqualified stock option accounting results in a deferred tax asset based on compensation expense for the year.

• Accounting for nonqualified stock options provides the employer a tax deduction for the intrinsic value of the options at the date of exercise.

• The tax deduction for the options exercised will match the amount of the GAAP compensation expense for those options exercised.