Current financial accounting standards require
A) the use of the fair value method,but not the intrinsic value method.
B) the use of the fair value method and the intrinsic value method to account for each plan.
C) disclosure in the notes to the financial statements of compensation expense under the fair value method if the intrinsic value method is used.
D) disclosure in the notes to the financial statements of compensation expense under the intrinsic value method if the fair value method is used.

Question

Quizplus · Accepted Answer

Current financial accounting standards, specifically under ASC Topic 718 (formerly SFAS No. 123R), require the use of the fair value method for stock compensation. The intrinsic value method, which was allowed under the old standard (APB Opinion No. 25), is no longer permitted for financial reporting purposes.

Current Financial Accounting Standards Require