Shares Paid On The Accounting Problems

Although the Share-Based Payment (SBP) system represented by stock options has undergone a course of several decades in western developed countries and it did play an active role in motivating employees working diligently for their companies in a long term, people have to reevaluate it and its accounting problems with the eruption of financial scandals of Enron, WorldCom in U.S.A. As a result, IASB, FASB issued or revised the accounting standard on SBP so as to strengthen the accounting regulations on SBP in 2004.In recent years, there is an increase in SBP activities (such as employee stock options) with the deepening of reform on the economic system in China. It is imperative that accounting standard on SBP be set up for the market after the revision of "Corporate Law" and "Securities Law" and the issuing of "Share Motivating Measures for Listed Companies (To be tested)" in 2005. In order to satisfy the needs for accounting for SBP transactions of the companies, Ministry of Finance issued Accounting Standard on SBP in 2006 with reference to IFRS and the present rules of the supervising organizations based on adequate researches.Herein, this dissertation tries to make a further research on the accounting problems on SBP (mainly on its accounting measurement problems) with the purpose of bettering understand the SBP system, guide the practical activities on SBP effectively. Several suggestions on how to carry out SBP system, how to perfect and promote the effective implementation on SBP Accounting Standard are provided.This dissertation comprises four parts.The first part gives a general description of SBP which discusses its concept, classification, nature and functions, which are the foundation for the following discussions. The literatures related to its accounting problems are also introduced. The second part makes discussion on the accounting problems on SBP (mainly on its accounting measurement problems). Firstly, a brief discussion on the accounting recognition and information disclosure of SBP is made. Secondly, the choosing of measurement attribute and measurement date, the fair value measurement attribute for SBP are emphasized. Other measurement problems, such as treatment on vesting conditions, modifications of clauses and conditions of SBP, reloading of stock options, cash settlement, etc., are discussed further.The third part gives an introduction to the development on the SBP accounting. Based on analysis of the influencing factors on SBP system, it concludes the status quo of SBP accounting in China. An international comparison on SBP accounting is also made to be referenced by us, and the possible emerging problems of implementing the Accounting Standard on SBP are also pointed out. Besides, a case study is given to show the latest development of SBP in China.The fourth part is the most practical one. It provides several suggestions on how to promote the effective implementation of Accounting Standard on SBP. Suggestions may include: carry out the SBP system effectively, perfect the Standard on SBP further, provide more professional education for persons concerned and strengthen the supervision & law execution on SBP.