Stock option (and other share-based) plans often specify a performance condition or a market condition that must be satisfied before employees are allowed the benefits of the award. Describe the general approach we use to account for performance-based options and options with market-related conditions.
Answer to relevant QuestionsWhat is a simple capital structure? How is EPS determined for a company with a simple capital structure?The treasury stock method is used to incorporate the dilutive effect of stock options, stock warrants, and similar securities. Describe this method as it applies to diluted EPS.When the income statement includes one or more of the separately reported items, such as discontinued operations or extraordinary items, which amounts require per share presentation?Refer to the situation described in BE 19-2. Suppose that the options expire without being exercised. Ignoring taxes, what journal entry will National record?Niles Company granted 9 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $5 per share on January 1, 2010, the ...
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