Which of the following describes the correct treatment of nonqualified stock options(NQOs) granted when ASC 718 did not apply?
A) Financial-expense value over vesting period; tax-deduct bargain element at exercise.
B) Financial-expense value over vesting period; tax-no deduction.
C) Financial-no expense; tax-deduct bargain element at exercise.
D) Financial-no expense; tax-no deduction.

Question

Quizplus · Accepted Answer

Before ASC 718, companies did not recognize an expense for NQOs in financial statements, but they could deduct the bargain element at exercise for tax purposes.

Which of the Following Describes the Correct Treatment of Nonqualified