With the reluctance and downright opposition of Companies to expensing stock options, with the benefit of hindsight, was...
With the reluctance and downright opposition of Companies to expensing stock options, with the benefit of hindsight, was their stance justified?
Homework Answers
No there are separate beliefs as one say that it helps in better presentation of financial statements whereas it hampers the small scale industry business.
earlier stock options were just shown as note but with change in law in 2006 now we have to show employee compensation as expense which is debatable part.
as earlier, companies used to show less salary and instead offer shares which would increase profit
on other side it is said that deciding its value is a technical task as it is issued at lower price and hence there is no specified value which can be used
so we can’t say that whether stance of companies was justified or not but now law exists and it needs to be followed
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