Accounting Treatment of Share-Based Compensation

A company, Tech Innovations Inc., grants share options to its employees as part of its compensation strategy. The share options allow employees to purchase shares at a predetermined price, or exercise price, which is set at the market price at the grant date.

During the fiscal year, Tech Innovations Inc. recognized an expense relating to these share options as part of its employee compensation. They granted options with a fair value of $50,000, which will vest over three years. The company's income statement reflects this expense as it relates to the service provided by employees.

Which of the following statements about the accounting treatment of share-based compensation at Tech Innovations Inc. is correct?