Study On Accounting Recognition And Measurement Of Executive Stock Option

All the wile, stock option 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 shareholders 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. The appearance of new incentive methods, such as stock option, changed the single award system used for a long times in our enterprises, and it made the benefit relations between managers, employees and enterprises closer. It also cut down the cost of principal-agent.At present, the different parties of our society have their own opinions about the reasonableness and legitimate of stock option incentive system established by corporations which having not related systems fears to drop behind their competitions, but also worries about the aftereffect. Therefore, how to rule and push this strategic system construction in polices which is very important to the quality of the entities' development, how to create the system environment to practice stock option plan, has become the urgent mission which the government and the entities have to face.Stock option system involves extensive matters, but the accounting for stock option is the core content of them. In accounting theory, there are many papers about accounting for stock option have published since 1999.There are some new ideas in those papers. The scientific and reasonable accounting process of stock option relate with development and criterion of stock option system directly, which will influence the incentive function. Therefore, how to establish a set of accounting systems or rules of stock option is the pressing job which the staff of accounting theory.The author expects to draw the outline a complete theory and methodical system about stock option accounting through the systematic research of recognition, measurement and disclosure. Meanwhile, the author tires the development skeleton of accounting for stock option in western countries, including the United States, systematically, derives theoretical distillation, follows the development trend of the standards, and uses the experience of them for reference. Based on such reference, the author tries to summarize essence approaches of accounting for stock option in the experimental entities in our country, and expects to provide theoretical basis andcountermeasure for constructing our stock option plan. There are three parts in this papers.Chapter 1: " Summarization on Executive Stock Option" mainly stock option is considered by experts of corporate governance as the effective incentive scheme to solve principal-agent problems. Advantages and disadvantages of executive stock option and experience and lessons .Chapter 2: " Study on Accounting Recognizing and Measuring of Our Executive Stock Option" introduce accounting process of executive stock option in America and accounting Process of executive stock option in our country. The author realizes that stock option should be recognized as an equity from the view of the credit side in the transaction and cause an expense from the debit side of the transaction because it means the awards paid off for services received by the entity, it has economic costs, and it has value time. The author assumes the executive stock option should be recognized at grant day because the executives have option and the enterprise cannot deal with these stocks. At grant day, the cost of executive stock option is related to the stock price in market. At grant day, the accounting principal is complied with and the enterprise can be appreciated and evaluated. At grant day, the stockholder can know rewards and costs. As to measuring, the author also realizes that even the stock option is measured at the fair value, it still in keeping with the recognition standard of measurable.Chapter 3: "Suggestion on Executive Stock Option in Our Country" is ab...