Client X offers a generous employee compensation package that includes employee stock options. The exercise price...

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Accounting

Client X offers a generous employee compensation package thatincludes employee stock options. The exercise price has always beenequal to the market price of the stock at the date of grant. Thecorporate controller, John Jones, believes that employee stockoptions, like all obligations to issue the corporation's own stock,are equity. The new staff accountant, Marcy Means, disagrees. Marcyargues that when a company issues stock for less than currentvalue, the value of preexisting stockholders' shares is diluted.Write a team consensus response of no more than 700 words in whichyou answer the following requirements: Pretend you are hired todebate the issue of the proper treatment of options written on acompany's own stock. Formulate your argument, citing concepts anddefinitions to buttress your case, assuming: You are siding withJohn

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Answer As indicated by FASB Act 71710252 entity ought to perceive the administration or service got from representatives or employees in share bond payments when these are received It ought to perceive or recognize as increase in equity or liability which rely on instrument gave as the instrument fulfill classification criteria Employee stock option is for fundamentally option given by See Answer

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