The Research On Accounting Of Executive Stock Option

Executive Stock Option(ESO)is an economic proceeding which possesses complex features. Actually there isn't a consensus on the understanding of its economic substance so far. Thus there are various ESO accounting recognition views. First, this article reviews the literature of ESO Accounting Research. Then illustrates the theoretical basis of ESO accounting, describes the status and problems of China's current ESO Accounting Standards. On this basis, puts forward view that the economic essence of ESO is the Remuneration that the company pays for managers'recessive human capital, and integrate financial accounting conceptual framework, discuss the accounting recognition, measurement and disclosure issues about the executive stock options. Transaction object of ESO is Recessive human capital. It should be recognized as intangible asset because it meets the definition and recognized standards of intangible asset. The equity that managers obtain by ESO should be recognized as managers'equity because it is different from the equity and the claim. Accounting measurement of ESO should use fair value method. For providing financial information demander useful information, accounting disclosure of ESO should offer details. Finally, the article put forward the recommendation to improve the treatments of ESO.