Under US GAAP, a Deferred Tax Asset for Stock Options

question 70

Multiple Choice

Under U.S. GAAP, a deferred tax asset for stock options:

• A)Is created for the cumulative amount of the fair value of the options the company has recorded for compensation expense.
• B)Is the portion of the options' intrinsic value earned to date times the tax rate.
• C)Is the tax rate times the fair value of all the options.
• D)Isn't created if the award is "in the money;" that is, it has intrinsic value.

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Definitions:

Normal Distribution

A probability distribution that is symmetric about its mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Sampling Distribution

The likelihood distribution associated with a particular statistic derived from a random sample.

Simple Random Samples

Samples drawn in such a way that every member of the population has an equal chance of being selected, ensuring that the sample represents the population well.

Proportion

A statistic that measures the fraction of the total number of items in a set that are of a particular category or characteristic.