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Basic Question 13 of 14
Which options are exercised, according to SFAS 123, ______ should be debited and ______ should be credited.
II. paid-in capital - stock options
III. compensation expense
IV. common stock (par)
V. paid in capital in excess of par
I. cash
II. paid-in capital - stock options
III. compensation expense
IV. common stock (par)
V. paid in capital in excess of par
User Contributed Comments 3
| User | Comment |
|---|---|
| bmeisner | How does this agree with the question earlier about debiting compensation expense? |
| ssradja | you debit it when granted, not exercised as this question asks. |
| quanttrader | when granted you credit paid-in capital (stock options), when exercised you debit paid-in capital and credit paid in capital in excess of par |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
explain issues associated with accounting for share-based compensation;
explain how accounting for stock grants and stock options affects financial statements, and the importance of companies' assumptions in valuing these grants and options.
CFA® 2025 Level II Curriculum, Volume 2, Module 11.