Compensation expense must be adjusted during the service period to reflect changes in the fair value of options caused by changes in the market price of the underlying shares. O True O False
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- After the forfeiture of a portion of stock options and before the end of the service period, total compensation expense and Paid-in-Capital Stock Options are adjusted to reflect the fair value of the remaining stock options only. .true • FalseAccording to IFRS, once the total compensation is measured at the date of grant A. It can be changed in future periods related to a change in market conditions B. It can be changed to reflect the rise or fall in the market price of the company's ordinary shares C. A company is permitted to adjust tge number of share options expected to the actual number of instruments vested D. All of the choices are correctUnder IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall be credited to income during the period that the options lapse remain in equity. be converted into a liability. be credited to expense during the period the options lapse.
- What is restricted stock? How do restricted stock awards differ from restricted stock units (RSUs)? Describe how compensation expense is determined and recorded for a restricted stock award plan.The fair value of a stock can be determined by the factors of market forces Select one: a. True b. False2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability.
- On what basis are NQ stock options usually taxed when the option has no readily ascertainable fair market value? a. the difference between the fair market value of the shares when purchased and the option price b. the fair market value of the shares c. the option price plus 1⁄2 the fair market value of the stock when sold d. the price when the shares are sold minus the original option valueThe exercise price and market price of stock under a fixed compensatory stock option plan are equal on the grant date. The fair value of the options is greater than the option price . Under the fair value method Compensation expense will be recognized in connection with the option plan No compensation expense will be recognized in connection with the option plan Deferred compensation will be recognized No paid-in capital from stock options will be recognizedIf shares are issued for a non-cash asset, the share should be recorded at? a. Zero b. Fair market value c. Par or stated value d. Cost
- Stock option plans provide employees the option to purchase: (a) a specified number of shares of the firm’s stock, (b) at a specified price, (c) during a specified period of time. One of the most controversial aspects of accounting for stock-based compensation is how the fair value of stock options should be measured. Describe the general approach to measuring fair value.When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock, what account(s) should be debited?Required to answer. Single choice. a. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value b. Treasury stock for the purchase price c. Treasury stock for the par value and paid-in capital in excess of par for the excess of the purchase price over the par value d. Paid-in capital in excess of par for the purchase priceIn an equity swap where a liability is settled through the issuance of equity securities A.no gain or loss is recognized B.gains are recognized as Share Premium, losses are expensed. C.gain or loss is recognized as the difference between the measurement amount of the equity securities issued and the carrying amount of the liability derecognized D.any apparent gain or loss is recognized in equity as an addition to share premium
