Accounting for Stock Options

As public companies begin their new fiscal years, they are implementing a new and controversial Financial Accounting Standards Board (FASB, 2004) proposal for expensing stock options. Applied to 2003 and 2004, this rule would have slashed reported earnings of the Standard & Poor's 500 by 8.6 and 7.4 percent; the effect in the bubble years would have been more than twice as large. We describe the history of how these options have been expensed for financial statement purposes. We assess the new FASB approach and find that it is deeply flawed. The main purpose of the paper is to describe an alternative options expense valuation method, the Bulow-Shoven approach, that addresses these problems. Our approach is simpler than the new FASB methodology, less prone to earnings manipulation and more consistent with the way the rest of compensation is treated in financial statements.

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Inferring U.S. Tax Liability from Financial Statement Information

Journal of the American Taxation Association ◽

10.2308/jata.2009.31.1.29 ◽

2009 ◽

Vol 31 (1) ◽

pp. 29-63 ◽

Cited By ~ 23

Author(s):

Petro Lisowsky

Keyword(s):

Stock Options ◽

Accounting Standards ◽

Financial Statements ◽

Income Taxes ◽

Financial Accounting ◽

Financial Statement ◽

Corporate Tax ◽

Data Set ◽

Accounting For Income Taxes ◽

Tax Expense

Abstract: Using a multi-year matched tax return-financial statement data set, this study builds empirical models that infer U.S. tax liability on the corporate tax return from publicly available financial statement disclosures, including those of Statement on Financial Accounting Standards No. 109, Accounting for Income Taxes. Results show that current U.S. tax expense, the tax benefit from stock options, current-year tax cushion accrual, consolidation book-tax differences, and R&D are informative in inferring actual tax, while intraperiod tax allocation is not. Additionally, the sign of pretax book income and the existence of net operating loss carryforwards are useful partitioning variables in estimating actual tax. In general, for every dollar of current U.S. tax expense reported on the financial statements, approximately $0.70 is reported in U.S. tax liability on the tax return. The models are validated using a holdout sample, providing support for the notion that public parties can reliably use these results to estimate a firm's tax position. Additional tests reveal a hierarchy of subsamples that researchers may employ when maximizing the usefulness of tax-related disclosures in inferring U.S. tax liability.

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Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on FASB Exposure Draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material

Current Issues in Auditing ◽

10.2308/ciia-51450 ◽

2016 ◽

Vol 10 (2) ◽

pp. C1-C9

Author(s):

Urton L. Anderson ◽

Marcus M. Doxey ◽

Marshall A. Geiger ◽

Willie E. Gist ◽

Diane J. Janvrin ◽

...

Keyword(s):

Accounting Standards ◽

Financial Statements ◽

Data Availability ◽

Financial Accounting ◽

Financial Statement ◽

Financial Accounting Standards Board ◽

Accounting Standard ◽

Stated Objective ◽

Auditing Standards ◽

The Way

SUMMARY On September 24, 2015 the Financial Accounting Standards Board (FASB) solicited public comments on a proposed Accounting Standards Update of the FASB Accounting Standards Codification. The stated objective is to improve the effectiveness of footnote disclosures to financial statement users. The focus of the Update is to clarify the way materiality should be considered when assessing requirements for providing information in the notes. The comment period ended on December 8, 2015. This commentary summarizes the contributors' views on these amendments. Data Availability: The exposure draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material is available at: http://www.fasb.org/cs/ContentServer?c= Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176166402325

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EVALUASI STANDAR AKUNTANSI KEUANGAN ENTITAS MIKRO KECIL DAN MENENGAH (SAK EMKM) TAHUN 2018 PADA USAHA SINAR TERANG DI SAMARINDA

Research Journal of Accounting and Business Management ◽

10.31293/rjabm.v3i1.4215 ◽

2019 ◽

Vol 3 (1) ◽

pp. 152

Author(s):

Pandu Prahadi Pangestu, Elfreda Aplonia Lau, Sunarto

Keyword(s):

Accounting Standards ◽

Financial Statements ◽

Financial Accounting ◽

Financial Statement ◽

Analysis Technique ◽

Descriptive Method

This study aims to evaluate whether the recognition of items in financial statements, measurement of financial statement elements, presentation of items in financial statements and disclosure of financial statements in Sinar Terang Business are in accordance with the provisions in Micro, Small and Medium Entity Financial Accounting Standards (SAK EMKM) 2018.The theory used in this study is financial accounting. The hypothesis stated is the recognition of accounts in financial statements, measurement of financial statements, presentation of items in financial statements, and disclosure of financial statements not in accordance with the 2018 Micro, Small and Medium Entity Accounting Standards (SAK EMKM).The analysis technique used in this study is a comparative descriptive method, which is a method that compares accounting treatment that includes recognition, measurement, presentation and disclosure based on SAK EMKM 2018 with recognition, measurement, presentation and disclosure in Sinar Business and Champion methods for calculating checklist value in determining conformity criteria.The results of the study indicate that the recognition and measurement of the items in the financial statements of Sinar Terang Business are not in accordance with SAK EMKM. Whereas the presentation and disclosure of financial statements for Sinar Terang Business do not match the SAK EMKM

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Analysis Of Presentation Of Sharia Financial Statements According To Psak 101 At Pt. Mandiri Sharia Bank

International Journal of Science, Technology & Management ◽

10.46729/ijstm.v2i4.283 ◽

2021 ◽

Vol 2 (4) ◽

pp. 1175-1183

Author(s):

Fera Riske Anggita ◽

Tommy Kuncara

Keyword(s):

Accounting Standards ◽

Secondary Data ◽

Financial Statements ◽

Relevant Information ◽

Financial Accounting ◽

Financial Statement ◽

Islamic State ◽

Literature Study ◽

Financial Position ◽

Other Information

The presentation of Islamic Financial Statements has been regulated in PSAK 101 and every bank needs to refer to it. As we know, PT Bank Syariah Mandiri is the number 1 largest Islamic bank in Indonesia and other information obtained by researchers, PT Bank Syariah Mandiri will merge with 2 other Islamic state-owned banks, namely PT Bank BNI Syariah and PT Bank BRI Syariah. Therefore, researchers are interested in examining whether the financial statements of PT Bank Syariah Mandiri are appropriate in applying the application of Financial Accounting Standards 101. The types of data used are qualitative and quantitative data, the data used are general company information and company financial statement information in 2019. Sources the data used is secondary data. The data collection method is literature study. In the financial statements of PT Bank Syariah Mandiri, the bank has reported all components of the financial statements in PSAK 101. In the Statement of Financial Position PT Bank Syariah Mandiri does not include the Istishna Assets in Settlement and Salam Receivable accounts in the Statement of Financial Position, but in PSAK 101 Paragraph 61 explains Statement of Financial Accounting Standards 101 does not regulate the composition or format of presentation of statement of financial position items. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position. However, in PSAK 101 Paragraph 61 explaining the Statement of Financial Accounting Standards 101 does not regulate the composition or format of the presentation of the statement of financial position. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position. However, in PSAK 101 Paragraph 61 explaining the Statement of Financial Accounting Standards 101 does not regulate the composition or format of the presentation of the statement of financial position. PT Bank Syariah Mandiri continues to present relevant information on the Statement of Financial Position.

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ANALISIS PENYAJIAN LAPORAN KEUANGAN BERDASARKAN PENERAPAN STANDAR AKUNTANSI KEUANGAN ENTITAS TANPA AKUNTABILITAS PUBLIK PADA PT. FORTUNA INTI ALAM

GOING CONCERN : JURNAL RISET AKUNTANSI ◽

10.32400/gc.12.01.17131.2017 ◽

2017 ◽

Vol 12 (01) ◽

Author(s):

Marddyanto Dwi Saputra ◽

Jullie J. Sondakh ◽

Treesje Runtu

Keyword(s):

Decision Making ◽

Cash Flow ◽

Descriptive Analysis ◽

Accounting Standards ◽

Financial Statements ◽

Financial Accounting ◽

Financial Statement ◽

Public Accountability ◽

Financial Situation ◽

Chartered Accountants

The financial statements in principle are the result of the accounting process used to communicate the financial situation to internal and external parties that are aimed at decision making. The importance of the financial statements, then the financial statement should be prepared carefully and without errors. Financial Accounting Standards generally are not in accordance with entities whose accountability is not as significant. Therefore, the Institute of Indonesia Chartered Accountants (IAI) has issued Financial Accounting Standards Entity Without Public Accountability (SAK ETAP) intended for entities that do not have significant public accountability and publish financial statements for general purposes for external users. This study aims to analyze the implementation of ETAP in the presentation of PT. Fortuna Inti Alam’s financial statement. The method used in this study is comparative descriptive analysis. Results of this research is based on the financial statements of 2016 show that PT. Fortuna Inti Alam has implemented ETAP but it is not fully complete yet. The Company has not presented Statement of Owner’s Equity, Cash Flow Statement, and Notes to Financial Statements. This research suggests that companies can prepare components of other financial statements in accordance with applicable standards.Keywords : Financial Statements, SAK ETAP.

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"Replika Endemi" Resistensi PSAK 71 Sebagai Countercylical Terhadap Sustainability Perbankan Ditengah Pandemi

Jurnal Akuntansi Maranatha ◽

10.28932/jam.v13i1.3195 ◽

2021 ◽

pp. 109-117

Author(s):

Nicholas Alexander Tungga ◽

Melithasya Angelina ◽

Elliza .

Keyword(s):

Accounting Standards ◽

Financial Statements ◽

Financial Accounting ◽

Current Status ◽

Corporate Accountability ◽

Financial Accounting Standards Board ◽

Model Framework ◽

Financial Reports ◽

Framework Design ◽

Economic Upturn

Financial reports are important because they are useful for providing an overview for stakeholders in their decision making. Where in the preparation of financial statements the main regulation used is the Statement of Financial Accounting Standards (PSAK) established by the Indonesian Institute of Accountants (IAI) through the Financial Accounting Standards Board (DSAK). In the current status quo of Indonesia in facing the Covid-19 pandemic, the existence of PSAK has begun to be tested, adjustments must be made to financial accounting standards which are useful to strengthen the lines of corporate accountability in Indonesia and are able to answer the main urgency of Indonesia today, namely the weakening of the country's economy. The purpose of this paper is to produce a framework that can later become an alternative for banks in making decisions for implementing the PSAK 71 post model. The approach used in this paper is a qualitative approach by providing arguments and solutions for Indonesia's current economic conditions through the resulting framework design. After considering the aspects that affect the risk of bad credit, the conclusion is that PSAK 71 is able to trigger an economic upturn in Indonesia, because in its implementation it does not necessarily look at one aspect only but considers other aspects in responding to issues related to bad credit. Keywords: PSAK 71, Post Model Framework, Bad Credit, Indonesian Economy

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New financial statement reporting requirements for healthcare entities and insurers

Journal of Hospital Administration ◽

10.5430/jha.v2n3p21 ◽

2013 ◽

Vol 2 (3) ◽

pp. 21

Author(s):

Alan Reinstein ◽

Natalie Tatiana Churyk

Keyword(s):

Health Care ◽

Accounting Standards ◽

Financial Accounting ◽

Financial Statement ◽

Financial Accounting Standards Board ◽

Reporting Requirements ◽

The Future

Since 2010, the Financial Accounting Standards Board issued several Accounting Standards Updates [ASUs] and other Authoritative Standards that affect Health Care Entities and Insurers, requiring them to more consistently account for and disclose their reporting of charitable and other costs. Also, in light of the main portions of Obama Care becoming effective in 2014, the FASB required such entities to more consistently and broadly disclose how they account for their bad debts, especially since the new law will limit such payments in the future. This article summarizes the provisions of the new Standards and provides examples of their application, in order to help health care entities and insurers understand the new provisions and implications.

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A Note On Accounting For Employee Stock Options When Reporting Diluted Earnings Per Share Under The Treasury Stock Method

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v6i10.2477 ◽

2011 ◽

Vol 6 (10) ◽

Author(s):

David T. Doran

Keyword(s):

Stock Options ◽

A Priori ◽

Market Price ◽

Accounting Standards ◽

Fair Value ◽

Financial Accounting ◽

Employee Stock Options ◽

Financial Accounting Standards Board ◽

Earnings Per Share ◽

Free Environment

Firms must currently apply the fair value method in determining the amount of employee compensation incurred in the case of employee stock options.  Current GAAP also requires that for purposes of calculating diluted earnings per share (EPS), the treasury stock method be applied where the assumed proceeds from exercise of the optioned shares is used to purchase shares of the firm’s stock at its average market price of the earnings period.  These incremental shares increase the denominator for purposes of calculating diluted EPS.  These requirements are consistent across the pronouncements of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).  This study extends the work of Doran (2005) and Doran (2008).  These previous studies found that applying the treasury stock method where shares are assumed purchased at the average for the period price (instead of end of year price) understates the number of incremental shares (the denominator), which overstates diluted EPS.  However, these previous works assumed that no shares were actually purchased for the treasury during the earnings period.  The FASB indicates one reason that the average for the period price is appropriate is because if treasury shares purchases were to occur, “the shares would be purchased at various prices, not at the price at the end of the period.”  This study tests the notion that the average for the period price is appropriate under circumstances where the firm actually purchases shares for the treasury at its average market price during the earnings period.  This paper employs a simple one period model that assumes a risk free environment with complete certainty.  The model allows comparison of computed EPS with an a priori known, correct amount.  Consistent with Doran (2005) and Doran (2008), the results here again indicate that assuming purchase of treasury shares at their average market price of the earnings period understates the EPS denominator which results in EPS overstatement.  Correct diluted EPS is derived when the shares assumed purchased under the treasury stock method are acquired at the higher period ending market price.

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Ontwikkelingen in het conceptual framework

Maandblad Voor Accountancy en Bedrijfseconomie ◽

10.5117/mab.87.21915 ◽

2013 ◽

Vol 87 (9) ◽

pp. 355-364

Author(s):

Dick Van Offeren ◽

Joop Witjes ◽

Tim Verdoes

Keyword(s):

Conceptual Framework ◽

Financial Reporting ◽

Accounting Standards ◽

Financial Statements ◽

Financial Accounting ◽

International Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

Reporting Framework ◽

International Accounting Standards Board

De International Accounting Standards Board (IASB) heeft recent het conceptual framework-project als kernproject aangemerkt. Het oorspronkelijke Framework for the preparation and presentation of financial statements (framework 1989) was aan een fundamentele herziening toe. Samen met de Financial Accounting Standards Board (FASB) heeft de IASB de eerste fase van het Conceptual framework for financial reporting (framework 2010) voltooid. In deze eerste fase worden twee onderwerpen besproken. Dit zijn het doel van financiële verslaggeving en de kwalitatieve kenmerken van financiële verslaggeving. Wij bespreken deze twee onderwerpen en gaan in op de verschillen tussen het framework 2010 en het framework 1989. Wij benadrukken het verschil in toepassingsgebied van de twee frameworks. Het framework 2010 is gericht op het ruimere begrip financial reporting, financiële verslaggeving en het framework 1989 was beperkt tot financial statements, jaarrekeningen.

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Impact Of IASB & FASB On Financial Statements

International Business & Economics Research Journal (IBER) ◽

10.19030/iber.v8i8.3160 ◽

2011 ◽

Vol 8 (8) ◽

Author(s):

Veronica Paz ◽

Thomas Griffin

Keyword(s):

Conceptual Framework ◽

Accounting Standards ◽

Financial Statements ◽

Financial Accounting ◽

International Accounting ◽

International Accounting Standards ◽

Financial Accounting Standards Board ◽

The Impact ◽

International Accounting Standards Board

The purpose of this research is to determine the impact of material differences in the conceptual framework of the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) on the financial statements.

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