The financial reporting of executive share options in the UK

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The financial reporting of executive share options in the UK. / Samuels, John; Lymer, Andrew.

In: British Accounting Review, Vol. 28, No. 3, 01.01.1996, p. 249-266.

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@article{3057d5457b05468b89b96156945216ea,
title = "The financial reporting of executive share options in the UK",
abstract = "This paper is based on a study into executive share option (ESO) schemes. It deals with the practical problems that need to be addressed when valuing and accounting for such options. In particular it makes a contribution to the debate as to whether the financial accounts can give a 'true and fair view' when the granting of an ESO is ignored in the accounting records of companies. The paper uses a case study to demonstrate how ESO could be valued and recorded in financial statements. The case is made for and against a number of possible treatments and we highlight the difficulty that exists in adequately dealing with this form of reward within the current accounting framework. The issue of the level of disclosure and the accouting treatment of share options awarded to directors of companies has recently been in the spotlight in the UK. The subject has been mentioned in both the Cadbury Report and the Greenbury Report, and there are recommendations on the appropriate treatment from the Urgent Issues Task Force. In the USA there are new SEC requirements on this matter, and the FASB has issued proposals on what it regards as the appropriate disclosure and accounting treatment of employee stock options (which includes options issued to directors and other executives). The FASB proposals of 1993 led to criticisms from politicians, the business community and professional accountants, and the proposals were modified in 1995.",
author = "John Samuels and Andrew Lymer",
year = "1996",
month = jan,
day = "1",
doi = "10.1006/bare.1996.0017",
language = "English",
volume = "28",
pages = "249--266",
journal = "The British Accounting Review",
issn = "0890-8389",
publisher = "Elsevier",
number = "3",

}

RIS

TY - JOUR

T1 - The financial reporting of executive share options in the UK

AU - Samuels, John

AU - Lymer, Andrew

PY - 1996/1/1

Y1 - 1996/1/1

N2 - This paper is based on a study into executive share option (ESO) schemes. It deals with the practical problems that need to be addressed when valuing and accounting for such options. In particular it makes a contribution to the debate as to whether the financial accounts can give a 'true and fair view' when the granting of an ESO is ignored in the accounting records of companies. The paper uses a case study to demonstrate how ESO could be valued and recorded in financial statements. The case is made for and against a number of possible treatments and we highlight the difficulty that exists in adequately dealing with this form of reward within the current accounting framework. The issue of the level of disclosure and the accouting treatment of share options awarded to directors of companies has recently been in the spotlight in the UK. The subject has been mentioned in both the Cadbury Report and the Greenbury Report, and there are recommendations on the appropriate treatment from the Urgent Issues Task Force. In the USA there are new SEC requirements on this matter, and the FASB has issued proposals on what it regards as the appropriate disclosure and accounting treatment of employee stock options (which includes options issued to directors and other executives). The FASB proposals of 1993 led to criticisms from politicians, the business community and professional accountants, and the proposals were modified in 1995.

AB - This paper is based on a study into executive share option (ESO) schemes. It deals with the practical problems that need to be addressed when valuing and accounting for such options. In particular it makes a contribution to the debate as to whether the financial accounts can give a 'true and fair view' when the granting of an ESO is ignored in the accounting records of companies. The paper uses a case study to demonstrate how ESO could be valued and recorded in financial statements. The case is made for and against a number of possible treatments and we highlight the difficulty that exists in adequately dealing with this form of reward within the current accounting framework. The issue of the level of disclosure and the accouting treatment of share options awarded to directors of companies has recently been in the spotlight in the UK. The subject has been mentioned in both the Cadbury Report and the Greenbury Report, and there are recommendations on the appropriate treatment from the Urgent Issues Task Force. In the USA there are new SEC requirements on this matter, and the FASB has issued proposals on what it regards as the appropriate disclosure and accounting treatment of employee stock options (which includes options issued to directors and other executives). The FASB proposals of 1993 led to criticisms from politicians, the business community and professional accountants, and the proposals were modified in 1995.

UR - http://www.scopus.com/inward/record.url?scp=0030239755&partnerID=8YFLogxK

U2 - 10.1006/bare.1996.0017

DO - 10.1006/bare.1996.0017

M3 - Article

AN - SCOPUS:0030239755

VL - 28

SP - 249

EP - 266

JO - The British Accounting Review

JF - The British Accounting Review

SN - 0890-8389

IS - 3

ER -