The Most Political Issue in the FASB's Most Recent Deliberations

question 174

Multiple Choice

The most political issue in the FASB's most recent deliberations and amendments to GAAP on stock options was:

• A) The negative effects on earnings of companies in the tech industry if they had to recognize expenses associated with stock compensation.
• B) The negative effects on assets of recognizing stock options in equity.
• C) The disclosure of stock compensation expense in the notes.
• D) Accounting for stock options that have not yet been granted to employees.

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Definitions:

Hedge

An investment made to reduce the risk of adverse price movements in an asset, usually by taking an offsetting position in a related security.

Treasury Bonds

Long-term, fixed-interest U.S. government debt securities with a maturity of more than ten years.

Interest Rate Futures

Financial derivatives contracts that obligate the buyer to purchase an asset (like Treasury bills or bonds) at a future date at a predetermined interest rate.

Spot Market

A financial market in which commodities or financial instruments are traded for immediate delivery.