Research On Executive Stock Option Accounting Standard

Accounting standards has an effect of directing the direction of the economics. The new Chinese Accounting Standard No.11(CAS11)–share payment which is released on Feb.15,2006 is concentrate on the accounting treatment of share payment, it will push the development of share option in China effectively. Share option is introduce into China in the late of 1990', and have been developed in some degree. But the research on accounting treatment of share option lags behind, and there is great difference with international accounting treatment. This paper concentrate on the recognition and measurement of share option of the accounting standard of China, and compare it with the IFRS, then give out some detail suggestion. The purpose is to push the research on accounting standards of share payment and tries to promote the healthy development of share payment transaction. This paper consists of five parts. Part 1: Introduction the definition of share option, and analyze the theoretical basis of the transaction of share option, and then make a review of the development history of America and china share option.Part 2:Analyse the important point of view and accounting treatment of the CAS No.11-Share payment, illustrate the new development of the new accounting standard.Part 3:Compare the CAS11 with IFRS2, and the CAS is tends towards to the IFRS.Part 4:Discuss two specific area of CAS11: Diluted EPS is dual-diluted; The different determination time of fare value of share payment and cash payment transaction ,which result in the different financial reporting information. The paper give out the reason and give out the point of view of the author.Part 5:On the basis of the first four parts, bring forward the detailed advise to our CAS11.CAS11 is a brand new standard in our country, which will be effected on Jan.1st,2007, but until now the detailed rules is not available and there is no interpretations, the content is relatively simple, its not perfect enough to guide the transaction occurred in real-life. The author give out the following suggestion: improving laws, rules and regulations to ensure the share option in perfect law environment; Improve the measurement of the fare value of share option: Measured by the independent valuation company and being reviewed by the CPA firm before recognized on the financial reports; regulate the transition item of CAS11;detailedsuggestion of supplement of the content and implementation of CAS11.The paper gives relatively detailed analyze, comparison and study of CAS11,bring forward positive suggestion and improvement opinion. Hoping to be helpful to the carrying out and emending of the new CAS11. Along with the development of the transaction of share option, there will be much more issue come out and waiting for us to study and explore.