The consequences of the FASB's 1998 proposal on accounting for stock option repricing

• 成果类型: Article
• 署名作者: Carter, ME; Lynch, LJ
• 署名单位: University of Pennsylvania; University of Virginia
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(02)00097-6
• 发表日期: 2003
• 关键词: earnings management; rewards

摘要

We examine repricing activity surrounding the FASB's 1998 announcement regarding accounting for repriced options. We find that repricing increases during, and decreases after, the 12-day window between the announcement and proposed effective dates, consistent with firms timing repricings to avoid recording an expense. We find that firms experiencing increasing earnings patterns, firms with earnings around zero, and growth firms are more likely to reprice in the window, but having repriced recently decreases the likelihood of doing so. The evidence suggests that firms trade off financial reporting benefits against reputation costs in decisions to time repricings to get favorable accounting treatment. (C) 2003 Elsevier Science B.V. All rights reserved.