The Accounting Method Required for Share-Based Compensation Arrangements Is A)I
B)II
C)III
D)IV

question 2

Multiple Choice

The accounting method required for share-based compensation arrangements is $\begin{array}{lll}& \text {Under IFRS}& \text {Under GAAP}\\ \text { I. } & \text { intrinsic method } & \text { intrinsic method } \\\text { II. } & \text { intrinsic method } & \text { fair value method } \\\text { III. } & \text { fair value method } & \text { intrinsic method }\end{array}$

• A)I
• B)II
• C)III
• D)IV

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or sales volume.

Total Cost

The sum of all expenses, both fixed and variable, involved in producing a good or providing a service.

Fixed Cost

Costs that do not change in total regardless of the level of output or activity in the short term.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.