Like @Jasonrobbins, We do not recognize the expense at grant either. We don't even post an entry.
@smsingla I don't think it mattera. As long as the expense is correct.
At work, I use the way Becker described. I book the expense per year and do not use an “Deferred account”.
The key is amortizing the options over the vesting period, because thats how they are being earned.
Debit Stock compensation expense – 10,000
Credit Additional paid in capital – stock options 10,000
Then lets say options are excercised the next year and total price is 8,000. Lets assume a par value aggregate of $4,000
Debit Cash – 8,000
Debit – Additional Paid in Capital – Stock options -10,000
credit – common stock 4,000
credit Additional paid in capital – common stock – 14,000
This is the way I do it and I have not received any push back from our auditors yet. Matter fact, I used Wiley to study for the exam and that was the first time I seen it done like that.
FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.
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