Which approach to accounting for employee stock options best reflects market pricing?

• 成果类型: Article; Proceedings Paper
• 署名作者: Landsman, Wayne R.; Peasnell, Ken V.; Pope, Peter F.; Yeh, Shu
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; Lancaster University; National Taiwan University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9008-x
• 发表日期: 2006
• 页码: 203-245
• 关键词: Valuation; eps

摘要

We use a residual income valuation framework to compare equity valuation implications of four approaches to employee stock options (ESOs) accounting: APB 25 recognize nothing, SFAS 123 (revised) recognize ESO expense, FASB Exposure Draft recognize and expense ESO asset and recognize ESO asset and liability. Theoretical analysis shows only grant date recognition of an asset and liability, and subsequent marking-to-market of the liability, results in accounting numbers that capture the dilution effects of ESOs on current shareholder value. Out-of-sample equity market value prediction tests and in-sample comparisons of model explanatory power also support the recognize ESO asset and liability method.