Which of the Following Statements Regarding Incentive Stock Options (ISOs)

question 46

Multiple Choice

Which of the following statements regarding incentive stock options (ISOs) is false?

• A) If ASC 718 (a codification of FAS 123R) does not apply, ISOs do not create book-tax differences.
• B) For ISOs granted when ASC 718 applies, book-tax differences are always unfavorable.
• C) If ASC 718 applies, the value expensed for book purposes in a given year is the value of the options that vest.
• D) If ASC 718 applies, book-tax differences associated with ISOs may be either permanent or temporary.

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