Case 3 Richardson Company is contemplating the establishment of a share-based compensation plan to provide...
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Accounting
Case 3 Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans. a. Identify the authoritative literature that addresses the accounting for share-based payment compensation plans. b. Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement? c. The Richardson Company board is also considering an employee share-purchase plan, but the Board does not want to record expense related to the plan. What criteria must be met to avoid recording expense on an employee stock-purchase plan?
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