In May 2019, FireEye, Inc. acquired all of the outstanding shares of privately held Verodin, for $201,155,000 in cash and 11,766,453 shares of FireEye common stock with a fair value of $167,580,000 and a par value of $0.0001 /share. In addition, FireEye converted Verodin’s unvested stock options to FireEye stock, and included $2,100,000 as part of acquisition consideration. Out-of-pocket acquisition-related costs were $840,000. The following table summarizes the date-of-acquisition fair values of the identifiable net assets acquired.

Net tangible assets	$21,050,000
Identifiable intangible assets:
Developed technology	53,620,000
Customer relationships	6,440,000
Trade names	2,240,000
Contract backlog	980,000
Deferred tax liability	1,240,000
Fair value of identifiable net assets	$83,090,000

 

Required

a. Assume the fair value of total stock options that FireEye assumed was $5,600,000 million. However, only $2,100,000 million was included as part of acquisition cost. Indicate true or false for each of the following statements relating to the criteria for determining the fair value of assumed stock options included as acquisition cost and the proper accounting for the remaining stock option fair value: