Question
My book states: if an employee forfeits a stock option because the employee fails to satisfy a service requirement (e.g., leaves employment), the company
My book states:
" if an employee forfeits a stock option because the employee fails to satisfy a service requirement (e.g., leaves employment), the company should adjust the estimate of compensation expense recorded in the current period (as a change in estimate). A company records this change in estimate by debiting Paid-in CapitalStock Options and crediting Compensation Expense for the amount of cumulative compensation expense recorded to date (thus decreasing compensation expense in the period of forfeiture)"
I am confused by the wording and wondering if I am dr./cr. the entire estimated amount or just the amount of the failed amount of options?
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