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Accountants' Handbook, Volume Two, Special Industries and Special Topics, 12th Edition by Lynford Graham, D. R. Carmichael

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Chapter 23

Stock-Based Compensation

A chapter on this topic in earlier editions of the Handbook was written by Peter T. Chingos, CPA of Mercer Human Resources Consulting, Walton T. Conn Jr., CPA, and John R. Deming, CPA, from KPMG Peat Marwick. The chapter has been rewritten for this edition by the editor.

23.1 History of Accounting for Stock-Based Compensation

(a) Stock Option Backdating Scandal

23.2 Accounting for Stock-Based Compensation

(a) Stock Option Accounting Using Fair Value

(b) Non-Public Company Option

(c) Restricted Stock Options

(d) Employee Stock Option Plans

23.3 Estimating Fair Value

(a) Black-Scholes Option Pricing Models

(i) Expected Volatility

(ii) Expected Dividends

(iii) Expected Option Lives

(b) Lattice/Binomial Option Pricing Models

(i) Computing the Option Price

(ii) Changing Methods

23.4 Special Topics

(a) Awards to Nonemployees for Goods and Services

(b) Awards Classified as Liabilities

(c) Stock Appreciation Rights as Compensation

(d) Modifications of Awards

(e) Income Taxation of Stock Compensation Plans

(f) Earnings per Share

(i) Diluted Earnings per Share

(g) Obtaining and Retaining Supporting Data

23.5 Disclosure

(a) Notes to the Financial Statements

(b) Disclosure Example

23.6 Accounting Standards Codification

23.7 International Perspective

23.8 Sources and Suggested References

23.1 History of Accounting for Stock-Based Compensation

The nature and types of stock-based compensation plans and awards have changed constantly over the years. However, ...

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