Which of the following describes the correct treatment of incentive stock options (ISOs)granted when ASC 718 applies?
A) Financial accounting-no expense; tax-no deduction.
B) Financial accounting-no expense; tax-deduct bargain element at exercise.
C) Financial-expense value over vesting period; tax-no deduction.
D) Financial-expense value over vesting period; tax-deduct bargain element at exercise.

Question

Quizplus · Accepted Answer

Under ASC 718, companies must recognize an expense for ISOs over the vesting period for financial accounting, but there is no tax deduction for the company when the options are exercised.

Which of the Following Describes the Correct Treatment of Incentive