When a stock option plan for employees is compensatory, the measurement date for determining compensation cost is the
A) Date the option plan is adopted, provided it precedes the date on which the options may first be exercised by less than one operating cycle
B) Date on which the options may first be exercised (if the first actual exercise is within the same operating period) or the date on which a recipient first exercises any of his options
C) First date on which are known both the number of shares than an individual employee is entitled to receive and the option or purchase price, if any
D) Date each option is granted

Question

Quizplus · Accepted Answer

The measurement date for determining compensation cost in a compensatory stock option plan is the first date on which both the number of shares that an individual employee is entitled to receive and the option or purchase price are known. This allows for the accurate calculation of the compensation cost associated with the stock options.

When a Stock Option Plan for Employees Is Compensatory, the Measurement