Stock compensation is generally recognized in one of two ways, which are the fair value method and the intrinsic method. The intrinsic value method allows companies to recognize the actual value of the stock as compensation expense. The measurement that takes place is based on the the value of the stock and the value on the date that the stock option is exercised. When we use the intrinsic value method in the practice of accounting, it allows the firm to recognize the intrinsic value at zero because the price of ...
Evaluate the various accounting treatments for stock compensation and how do they relate to the practice of accounting and its uses in business.