Stock Options And The Accounting Treatment Of Research

As far as the modern business and traditional business are concerned, the main feature is the separation of the operating right and ownership. The emergence of internal control and moral hazard lies in the fact that owners and managers have different interests and risks, so the enterprise must take relevant measures to make the executive turn from focusing on short-term motivation to long-term motivation. As an innovation of company incentive system, ESO has created many miracles. Nowadays, ESO is being introduced to China, we are expecting and imaging it. From the practice of ESO in America, we can believe that ESO will be the one of the best long-term motivating system towards executive. So it's vital that we research ESO deeply.By the means of theoretical and empirical methods, this thesis demonstrates that it is necessary to introduce ESO to China. At the same time, drawing lessons from American experience of the accounting for ESO, the thesis presents references to China's accounting for ESO.The thesis consists of four chapters , which are as follows:Chapter 1 is the theory based on this thesis. Section 1 explains the ESO's definition and characteristics and analyzes the rule of ESO. Section 2 tries to apply some useful economic theory in research of incentive measures to executives . The economic theories include Human capital and Principal-agent theory. In the modern business, the separation of ownership and operating right results in the multi-level principal agent links. In accordance to these theories, it's the best option to allow executives to share some residual claims. ESO program is exactly thiskind of system.Chapter 2 American accounting for ESOESO was born in American and has been working successfully for the past 20 years. Though the system of American ESO has experienced a complex process, it's core is identical in accounting. On the basis of the experiences of American accounting for ESO, the thesis tries to find out a method to solve the present problem in China.Chapter 3 the present situation of China's accounting for ESOThe accounting for ESO is a very important part of ESO program, so it's critical to research on the disclosure of ESO accounting information. On the foundation of the accounting programs which concludes the accounting measurement theory, the accounting reporting system and so on, the author put forward some questions in the reality of China's accounting for ESO.Chapter 4 research on the accounting for ESO in ChinaThis is the most important part in the thesis. The stock option accounting is a key to ESO, which is relevant to the feasibility of ESO. In the recent years , with the deepening of reform, more and more attentions are paid to ESO. Choosing the four elements as objective, aiming at the problems on the stock option accounting , the author put forward some countermeasures.Above all, the characters in this thesis are presented as follows:1,According to the present situation and the accounting program, the author brings forward some ideas .2,As far as the research means are concerned ,the author combines the theories with the facts and explains how these economic theories are embodied in stock option project. 3, The thesis suggests that Eso is defined as equity in the present situation.