The IASB Standard on Stock Options (IFRS 2)is Substantially the Same

question 27

Multiple Choice

The IASB standard on stock options (IFRS 2) is substantially the same as U.S.GAAP. How should stock options be accounted for?

• 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.

Distinguish between items recorded and not recorded by an accountant during partnership liquidation.

Understand the difference between fiscal and calendar years in accounting.

Comprehend the principles of cash and accrual basis of accounting.

Recognize the purpose and principles of adjusting entries in accounting.

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