Share-Based Compensation Reporting

Easy Employee Compensation Share-based Compensation

XYZ Corporation issued stock options to its employees as part of their share-based compensation plan. The options allow employees to purchase shares at a fixed price over a specified period. In its financial statements, XYZ must recognize the expense related to these options. Which of the following statements about share-based compensation reporting is true?

The expense must be recognized at the intrinsic value of the options at the grant date.

The fair value of the options is calculated using an option pricing model and recognized over the vesting period.

The total compensation expense is recognized in full at the grant date.

Hint

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