FASB's Statement 123 stipulates that companies must use an option valuation model to estimate the fair value of any option grants and then deduct this value when calculating profits.

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This statement is true. FASB's Statement 123 requires companies to use an option valuation model to estimate the fair value of any option grants and then deduct this value when calculating profits. This aims to provide transparency and accuracy in financial reporting by reflecting the true cost of employee compensation.

FASB's Statement 123 Stipulates That Companies Must Use an Option