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Measuring the Economic Promise Imbedded in Stock Options.
|Title:||Measuring the Economic Promise Imbedded in Stock Options.||
Volkan, Ara, author
Pinello, Arianna, author
Valencia, Adrian, author
|Type of Resource:||text|
|Extent:||1 online resource|
|Abstract:||On Jun 6, 2014, the CPA Letter Daily reported that, with convergence nearly complete, FASB will turn its focus to the simplification of accounting standards. In that vein, this article introduces a theoretical model of measuring stock options expense (SOE): the economic promise (EP) model. Although FASB contends that the market value of a company's stock should not be used in determining its equity and that changes in value should not be recognized in earnings, the authors of this article agree that the market value of a company's stock must be used to accurately measure and report SOE. This EP model determines total SOE at intrinsic values -- that is, the difference between the stock's market price and option price at a given date. The authors expect SOE estimated under the EP model to significantly differ from SOE reported under current rules; this suggests that, if adopted, the EP model would have a significant impact on amounts reported for net income and earnings per share.|
|Note(s):||The publisher's version of the article is available at http://ezproxy.fgcu.edu/login?url=https://search.proquest.com/docview/1677227299?accountid=10919|
|Persistent Link to This Record:||http://purl.flvc.org/fgcu/fd/fgcu_ir_000352|
|Use and Reproduction:||Copyright held by publisher.|
|Use and Reproduction:||http://rightsstatements.org/vocab/InC/1.0/|
|Is Part Of:||CPA Journal.|