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Essay / Research Paper Abstract
This is a 4 page paper that provides an overview of stock option valuation. The ethical implications to employees and stakeholders are explored. Bibliography lists 4 sources.
Page Count:
4 pages (~225 words per page)
File: KW60_KFebstk2.doc
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Unformatted sample text from the term paper:
investors, stakeholders, or consumers. On occasion, however, business ethics can become a more deeply-rooted internalized problem. For instance, just as a business might commit some ethical lapse in the course
of its market maneuverings, acquiring of other businesses, or internal employee management policies, even processes as fundamental as a business accounting standards have an ethical dimension which must not be
ignored. A great example of the ethical dimensions of accounting standards can be seen in the ongoing debate over the proper accounting practice for the issuance of stock options. In
some cases, variations in accounting practice for stock options have produced massive discrepancies between reported value and actual market value of an organization. An excellent case in point is eBay,
Inc. This paper will explore the ethical dimensions of fair value reporting of stock options for organizations, holding up eBays practices as a paragon example. This paragraph helps the student
provide an overview of the trend moving towards fair value accounting. For years now, stock options have provided an appealing means for developing organizations with limited cash resources to attract
top-tier talent without increasing baseline salary, by issuing options to acquire company stock at a fixed price during a fixed window (regardless of the actual movements of the stock). In
doing so, organizations not only offset their compensation obligations, but also inspire employees, at least theoretically, to produce excellent work and move the organization forward (since the organizations performance is
now tied to their own salary). However, while accounting standards for salaries are straightforward, this is not the case for stock options. Some companies choose to merely disclose the fair
value of these options on annual accounting statements, without making the official acknowledgement of the options as expenses and reporting them thusly ("Accounting", 2004). As such, even though the stock
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