A Research On Accounting Of Stock Option

As an innovative incentive mechanism that can solve principle-agent problems effectively, stock option has strongly promoted the economy of USA and been regarded as the propellant of "dot-com" revolution. The statistics show, among the Fortune 500 list, over 90% companies implement stock option scheme. In China, since it is first introduced in 1990's, stock option has been accepted and put into practice by more and more companies. According to statistics from Chinese entrepreneur's investigation system "2003 ? The investigation report for Chinese managers growing up and development", by September of 2002, among 3539 sample companies, nearly 3.7% of which have adopted the awards form of "stock option". However, it is regretful that the related auxiliary laws have not been published yet, and in addition, there still exists many disputes as to the accounting method for stock option in academy, therefore, the author will carry on a systematic and deep research on this topic.Directed by modern accounting theory, combined with existing achievements about theoretical researches and practical activities of stock option accounting both in and abroad, the author will study the theoretical framework and technical system of accounting for stock option following the processes of recognizing, measuring and disclosing. In the research, the author managed to establish a completed accounting system for stock option that can be adapted to the current conditions of our country.As far as recognizing is concerned, the author started the research with two core issues-which accounting element stock option should be identified? Whether the cost of incentive should be recognized as an expense? Based on the analysis and comments of different views, this paper put forward its own opinion: Under current accounting mode, stock option should be recognized as liability, while the incentive cost should be recognized as an expense.Measurement and recognition are closely related and inalienable organic system, therefore, after solving the problems of recognition, the author studied the issue of measurement:: The selection of measurement attributes for stock option and the how to determine the measurement date. The author suggested that the value of stock option could be measured by fair value at the grant date. Further, the author discussed the information disclosure issues of stock option in annual report, among which the author mainly discussed the problem about how to recognize the stock option in financial statements and disclose it off the financial statements.As to technical method, the author suggested that trend-predicting method could be used to estimate the vesting rate. The proposition of this method fills the blank of domestic relevant theoretical research; meanwhile, to some degree, it also has certain directive significance to practice too.