F7 - M3 - Stock compensation

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identify 2 types of stock options

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Terms in this set (3)

noncompensatory - under US GAAP, substantially all full time employees may participate; offered equally or as a percentage of salary; reasonable exercise period; and discount is no greater than that offered to stockholders

compensatory - compensation cost is determined on grant date, using an option pricing model

describe the computation and allocation of compensation expense under compensatory stock option plans

compensation cost is based on the FV of the equity instrument awarded, determined by an option pricing model. this cost is expensed and allocated over the service period

Describe the accounting for unexercised, expiring stock options.

any balance in "APIC - stock options" is reclassified to "apic - expired stock options" compensation expense is NOT affected by the expiration of options