Reading Verification Form

Spiceland, Sepe, and Tomassini

Chapter 19-A: Share-Based Compensation

1. What are the major differences in tax treatment between incentive plans and nonqualified plans?

2. What is restricted stock? How is compensation expense determined for a fixed stock award plan?

3. What are stock appreciation rights? How are they accounted for?

4. One of the most controversial aspects of accounting for stock based compensation is how the fair value of stock options should be measured. Describe the general approach to measuring fair value.