| 1.Motives and Backgrounds of ResearchIn 1952,in order to avoid heavy individual income tax, a US company named PFIZER, put the first Stock Option Plan into practice in the world. The Stock Option Plan gives the executives the right to buy a certain number of shares in the corporation at a fixed price for a certain number of years. The price at which the option is provided is called the "grant" price and is usually the market price at the time when the option are granted. Executives who have been granted stock options hope that the share price will group that they will be able to exercises the stock at the lower price and the sell at the current price. During the 90's of 20 century, with the Stock Change Market of US becoming more and more prosperous, the Stock Option Plan started to show its great incentive effort on employees. Just as Business Weekly says, Stock Option magically prompted the prosperous of America economy in the 90's of 20 century, and was called propellants of "dot-com" revolution. However, with the bankrupt of ENRON and the disclosure of series large companies, Stock Option confronted with the most serious problem than ever before. Even though, Chinese enterprises still show great interest in it. Recent years, many companies have taken Stock Option into practice in our country. Some listed companies in Hong Kong, such as Legend Group, have started to grant Stock Option to their senior mangers. Others, listed in Shanghai and Shenzhen, are making their efforts to bring it out.However, with the fast development of Stock Option, the accounting system seems too lag behind to meet the demands of the companies'. To some extent, the accounting system has become one of the fatal obstacles to the further development of Stock Option in China. That is why thisarticle is written. 2.Main content To begin with the basic theory of Stock Option, this article analyses its development and current situation and reviews its practice in our country. The emphasis of this paper is not on how to solve the problems of macro environments over the application of Stock Option, such as the efficiency of stock market, corporate governance and so on, but on how to build up a reasonable and scientific accounting system.This article is broken up into six sections.The first section is the principal theories of Stock Option and its accounting system. In this part, the Stock Option-related knowledge is introduced to readers, and great effort is concentrated on analyzing the achievements and current perplex of Stock Option in the United States. Then, I put forward my anticipation to the future of Stock Option. At last, I explained the accounting system for Stock Option and the necessary of building it in China.The second section is about the recognition of Stock Option in accounting. My opinion on this subject is that Stock Option should be recognized in grant day instead of vest day, for it's more reasonable and reliable.In the third section, I study on the measurement of Stock Option. I compared the two main measurements widely used in America-instinct value and fair value method. In my opinions, fair value method is a more objective and reasonable measurement to estimate the value of Stock Option. And then, I made an instant to demonstrate the whole process of pricing Stock Option with fair value. The forth section discusses about how to record the transactions in accounting. I set up a new model to record them in according with fair value measurement. In the fifth section, I proposes the issues that should be disclosed in the accounting report. I paid great attention to those disclosed in theout-balance-sheet items.In the sixth part, I put forward my suggestions to the problems about domestic accounting for Stock Option. I argued that the standardize of our accounting system should be proceeded step by step, and advised that the companies should use fixed Stock Option instead of flexible one in order to simplify the accounting work. In the end, I point out th... |
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