Executive Stock Option Accounting Issues

All the while, Executive Stock Options is considered by experts of corporate governance as the effective incentive scheme to solve principal - agent problems. This incentive mechanism harmonizes the contradiction between managers and share holders through sharing residual claim, and impels both to seek the identical benefit, then promotes the managers to create the outstanding performance, to meet the objective of maximizing the shareholders' value. Recently, many enterprises of China has developed stock option incentive mechanism and put them to practice, but, since government hasn't established the related documents, the practice doesn't have criterion and some shareholders' benefit is harmed in some enterprises. So, we need to have a deep research about its basic characteristic, related system environment and also the accounting principle.From the aspect of accounting, up to now we don't have related documents, and many accounting experts in our country still have different opinions about its intrinsic quality, which causes different choose of accounting process and reduces the comparability of accounting statement. Therefore, it's very necessary to have a good research into this problem.Directed by the modern accounting theory, combined with existed achievements about theoretical researches and practice activities of stock option accounting in the world, this paper begins with the processes of recognizing, measuring and disclosing, follows the new development trend in the whole world, in order to find out the most suitable accounting process of China. There are six chapters altogether. Chapter One mainly introduces the basic theory of Executive Stock Options. Chapter Two sets emphasis on the related system construction, and points out the main barriers of practice in China, and also provides some feasible suggestions. Chapter Three, Chapter Four and Chapter Five are the main body of this paper, and they discuss the recognition, measurement and disclosure of accounting for stock option respectively, which are based on the new development in the world. Based on the situation of our country, Chapter Six construes the actuality of accounting in China, and points out some useful suggestions.The author tries to make innovative work in the following aspects: 1. Since people still have divergence in the intrinsic quality of ESO, the author redefines its characteristic, which effects choose of accounting process directly. 2. About the problem of measurement, combined with the newest research achievement, the author forms her own opinion. 3. According to the analysis, the author tries to find out the suitable accounting process method of our country and points out some feasible suggestions.