Asked by Riley Bruns on Jun 16, 2024
Verified
According to current GAAP,the date when the terms for stock options are mutually agreed-upon and the stock options are awarded to employees is the
A) vesting date.
B) grant date.
C) exercise date.
D) payment date.
Stock Options
Contracts that give the holder the right, but not the obligation, to buy or sell a stock at a set price within a specified period.
GAAP
Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.
Grant Date
In the context of stock options, the grant date is the date on which an employee is given the right to exercise their options at a set price.
- Learn the protocols for accounting and reporting of stock-based compensation under the present guidelines of GAAP.
Verified Answer
JI
Johirul IslamJun 22, 2024
Final Answer :
B
Explanation :
The grant date is the date on which an employer and an employee reach consensus on the terms of a stock option award. It is when the stock option is granted, and the employee has the right to exercise it at a predetermined price, usually called the strike price. The grant date is a crucial date as it determines the fair value of the stock option award and is used to record expenses associated with the award. Vesting date is the date when an employee becomes eligible to exercise the stock option, exercise date is the date when an employee exercises the stock option, and payment date is the date when an employer pays the employee the value of the exercised stock option.
Learning Objectives
- Learn the protocols for accounting and reporting of stock-based compensation under the present guidelines of GAAP.