A Section 83(b) Election Freezes the Value of Restricted Stock

question 37

True/False

A section 83(b) election freezes the value of restricted stock for compensation purposes on the vesting date.

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Definitions:

Accounting Equation

The fundamental equation that represents the relationship between an entity's assets, liabilities, and owner's equity; Assets = Liabilities + Owner's Equity.

Revenue Recognition Principle

An accounting principle that stipulates revenue should be recognized and recorded when it is earned, regardless of when the cash is received.

Business Entity Principle

An accounting concept that treats a business as separate and distinct from its owners for purposes of recording financial transactions.

Monetary Unit Principle

An accounting principle that assumes business transactions or events can be measured and expressed in monetary units.