U.S. GAAP and IFRS require firms to amortize the fair value of stock options as an expense

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U.S. GAAP and IFRS require firms to amortize the fair value of stock options as an expense over the periods the firm expects to receive employee services as a result of granting the options. What is the theoretical rationale for this amortization?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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