How Should Stock Options Be Accounted for Under IASB Standard

question 8

Multiple Choice

How should stock options be accounted for under IASB standard on stock options (IFRS 2) ?

• A) Since their value is not determinable until a future date, they are not recorded, but only disclosed in the notes to the financial statements.
• B) A compensation expense is recorded based on the value of the options expected to vest as of the date the options are granted.
• C) An expense is recorded only if a market value for the options exists on the date the options are granted.
• D) The options are recorded as a liability for the value of the stock at the exercise date.

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Definitions:

Working Memory

A form of short-term memory that involves the temporary holding, processing, and manipulation of information for cognitive tasks.

Short-Term Memory

The capacity for holding a small amount of information in an active, readily available state for a short period.

Context-Dependent Memory

The principle that recall of information is easier when in the same context or environment where the memory was originally formed.

Serial-Order Effect

The impact of an item's position in a sequence on its recall, usually seen in memory tasks like remembering lists.