The intrinsic value method of measuring options based compensation is no longer supported by FASB and the IASB.

Question

Quizplus · Accepted Answer

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) now require companies to use the fair value method instead of the intrinsic value method for valuing stock options for financial reporting purposes. This change emphasizes the fair value of the options at the grant date, rather than just their intrinsic value.

The Intrinsic Value Method of Measuring Options Based Compensation Is