An Understanding of the Accounting for Employee Stock Options (ESOs)

question 68

Multiple Choice

An understanding of the accounting for employee stock options (ESOs) requires several definitions.Which of the following is not true?

• A)The grant date is the date employees exchange the option and cash for shares of common stock.
• B)The vesting date is the first date employees can exercise their stock options.
• C)A vesting period that depends only on the passage of time is a service condition
• D)A vesting period that depends on achieving a specified level of profitability or meeting some other nonshare-price-based target is a performance condition;
• E)A vesting period that depends on the firm's stock price reaching a specified target is a market condition.