The Research On The Accounting Recognition Of Executive Stock Options

Since the first Exeutive Stcok Opition (ESO) appeared in American company in 1952,it has been favored by every states and every corporation for its superiorities on corresponding benefits between the owners and the managers, cutting down agent costs, improving enterprise values.Our country has introduced this kind of system in the 1990s; many enterprises have positively carried on the practice. We can estimate that in the near future the stock option will certainly be used in our country's majority enterprises.In the world many accountants do massive researches about the stock option accounting.Especially in USA the research materials are most complete and thorough. The research in our country started slightly late, but still accumulated the massive precious research materials.Nowadays,there are two kinds of view about the accounting treatment of the exeutive stock opitions (ESO).The first is the expensing view, the second is distributing view.At first ,the paper summarizes the accounting standards in the USA. Then, using the corporate theory to analyze the ESO and find the economic substance of ESO is that executive shares the claim to the firm's residue, Using the accounting theory to analyze the accounting attribute of the ESO and point out the expending view does not conform to the definition of the accounting element. Then pointing out that the accounting model based on the stockholder theory is the reason why the FASB insists on the expensing view.on the fundament of analyzing its economic essence deeply, and come into a conclusion that distributing view. could reflect the economic essence of ESO truly, so the paper prefers the distributing view to the expensing view.