Fair Value Req. Disclosures : Grant date: date firm give stock option to employees. Mult. (price per opt)*(num of opt). divide by # of vesting periods. Use this number now. Yr 1 stk opt (increase), compensation expense (decrease). Yr 2, Yr3 repeat. @ Exercise single option is $10. Record par value for one option ($1) Record fair value for stock option (-$2). Record APIC as difference ($11). @ Expiration record fair value as (+2 for APIC-Expired option) and (-2 for stock options) Restrictive Stock: ALL ON O.E. SIDE! Cannot be traded until vesting period completed. record deferred compensation of ($stock* # of shares), common stock (par value* # of shares) and APIC (difference of the two). Yr1 Deferred compensation [1/2 (stock price* # of shares)], compensation expense (-Amount record for Def Comp) same in Yr2. NOA=CA-CL+NCA-NCL. Pay a lot of use a lot , if not, then Capital Lease ( debt increase, equity same, broken down into interest and depreciation exp). Convertible bond when issued, D2E for US GAAP >, after 1 yr D2E decreases b/c of interest exp., @ conversion, D2E equal. Capitalization Earnings > than expense, and D2E < expense. When stock is issued: NWC increase, cash increase, Current Ratio increase. Operating Lease (more room to borrow, no depreciation or interest exp-no change in D2E ratio, recorded as -rent exp and -cash) Asset value @ 100,000. 5yrs @ 25000=125000. PV=90000=[25000/1+(int rate)^1…5], when lease contract is set , Operating=no record. Capital=treated as purchase w/ lease liability. Lease payment paid:
This is the end of the preview. Sign up
access the rest of the document.
This note was uploaded on 06/29/2011 for the course FIN 322 taught by Professor Zhu during the Spring '11 term at Oakland University.