Current financial accounting standards require a) The use of the fair value meth

Question

Current financial accounting standards require
a) The use of the fair value method, but not the intrinsic value method b) the use of the fair value method and the intrinsic value method to account for each plan c) disclosure in the notes to the financial statements of compensation expense under the fair value method of the intrinsic value method is used d) disclosure in the notes to the financial statements of compensation expense under the intrinsic value method of the fair value method is used. Current financial accounting standards require
a) The use of the fair value method, but not the intrinsic value method b) the use of the fair value method and the intrinsic value method to account for each plan c) disclosure in the notes to the financial statements of compensation expense under the fair value method of the intrinsic value method is used d) disclosure in the notes to the financial statements of compensation expense under the intrinsic value method of the fair value method is used. Current financial accounting standards require
a) The use of the fair value method, but not the intrinsic value method b) the use of the fair value method and the intrinsic value method to account for each plan c) disclosure in the notes to the financial statements of compensation expense under the fair value method of the intrinsic value method is used d) disclosure in the notes to the financial statements of compensation expense under the intrinsic value method of the fair value method is used.

Explanation / Answer

Answer is c: disclosure in the notes to the financial statements of compensation expense under the fair value method of the intrinsic value method is used

Explanation

Accounting statndard for Stock-Based Compensation to Employees clearly favours fiar value method but does not force an entity to not use intrisnic value mehtod

But Entities electing to remain with the intrinsic value method must make pro forma disclosures of net income and, if presented, earnings per share, as if the fair value based method of accounting had been applied.

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