The accounting method that is used for stock appreciation rights (SARs)compensation plans is similar to the accounting procedures that can be used for
A)fixed compensatory stock option plans
B)performance-based stock option plans
C)noncompensatory stock option plans
D)both fixed compensatory and performance-based stock option plans

Question

Quizplus · Accepted Answer

The accounting method used for stock appreciation rights (SARs) compensation plans is similar to that used for both fixed compensatory and performance-based stock option plans. This is because all three compensation plans involve the issuance of equity-based compensation to employees, subject to certain conditions or restrictions. As such, the accounting procedures used for these plans are based on the fair value of the equity awards, as determined at the date of grant, and how this value is recognized over the vesting period.

The Accounting Method That Is Used for Stock Appreciation Rights