Problema Ca 16-4

(a)What are the major recommendations of the stock-based compensation pronouncement?

There are two major recommendations: the first is the top five officers in a company with rigged value set close to zero as possible. The second recommendation is a broad-based employee stock option plans on expanding employee corporate ownership, skilled worker recruitment and retention, research and innovation, economic growth, and international competitiveness.”

(b) How do the provisions of GAAP in this area differ from the bill introduced by members of Congress(Dreier and Eshoo), which would require expensing for options issued to only the top five officers in a company?

The provisions of GAAP are to value employee stock option that requires fair value. The bill recommends the top five officers are rewarded accordingly.

Which approach do you think would result in more useful information? (Focus on comparability.)

The approach congressman David Drier, and congresswoman Anna Eshoo were to launch honest reporting of stock option compensation and fair value for employees and investors. Company’s options have no comparison.

(c) The bill in Congress urges the FASB to develop a rule that preserves “the ability of companies to use this innovative tool to attract talented employees.” Write a response to these Congress-people explaining the importance of neutrality in financial accounting and reporting.

The FASB sets out to improve guidelines to resolve issues in a timely manner.

Neutrality in accounting are standards designed to provide the best possible information for economic decision making without being biased.