Accounting for stock option compensation expense
Naomi Smith has an option for 40,000 shares and at $0.818 per share, that’s a total expense of $32,720, however, this expense is not recorded all at once. The expense is recorded over the useful economic life of the grant. It includes the principles in accounting for stock compensation and specific examples illustrating topics such as: scope, measurement date, vesting conditions, expense attribution, and classification (i.e., liability or equity) the accounting required when awards are modified. select the “Copy to iBooks” option. Stock Based Compensation (also called Share Based Compensation or Equity Compensation) if a way of paying employees, executives, and directors or a company with ownership in the business. It is typically used to motivate employees beyond their regular cash based compensation (salary and bonus)