Under US GAAP, a Deferred Tax Asset for Stock Options

question 131

Multiple Choice

Under U.S. GAAP, a deferred tax asset for stock options:

• A) is created for the cumulative amount of the fair value of the options the company has recorded for compensation expense.
• B) is the portion of the options' intrinsic value earned to date times the tax rate.
• C) is the tax rate times the fair value of all the options.
• D) isn't created if the award is "in the money;" that is, it has intrinsic value.

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Definitions:

Assumption Of Risk

A legal doctrine that a person may not recover for an injury received when they voluntarily expose themselves to a known danger.

Voluntarily

Voluntarily refers to actions taken out of one's own free will without coercion or obligation from external forces.

Unreasonably

Acting without regard to what is fair, proper, or logical, often leading to harm or injustice.

Negligence Claim

A legal claim arising from failing to act with the level of care that someone of ordinary prudence would have exercised under the same circumstances, leading to harm or damage.