Firms' Voluntary Recognition of Stock-Based Compensation Expense
AbstractWe investigate factors associated with firms' decisions in 2002 and early 2003 to recognize stock-based compensation expense under Statement of Financial Accounting Standards (SFAS) No. 123. We find that the likelihood of SFAS 123 expense recognition is significantly related to the extent of the firm's participation in capital markets, the private incentives of top management and members of the board of directors, the level of information asymmetry, and political costs. Although recognizing firms have significantly smaller SFAS 123 expense, we find no significant incremental relation between recognition likelihood and SFAS 123 expense magnitude after controlling for other factors that we expect explain the recognition decision. We also find positive and significant announcement returns for earlier announcing firms, particularly those stating that increased earnings transparency motivates their decision. Copyright University of Chicago on behalf of the Institute of Professional Accounting, 2004.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Accounting Research.
Volume (Year): 42 (2004)
Issue (Month): 2 (05)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-8456
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Mahmud Hossain & Santanu Mitra & Zabihollah Rezaee, 2011. "Incremental information content of option-related excess tax benefit under FASB Statement No. 123R: A research note," International Journal of Accounting and Information Management, Emerald Group Publishing, vol. 19(2), pages 146-168, June.
- Edward J. Riedl & Suraj Srinivasan, 2007. "Signaling Firm Performance Through Financial Statement Presentation: An Analysis Using Special Items," Harvard Business School Working Papers 09-031, Harvard Business School.
- Shilpa Manaktala & John D. Phillips & Karen Teitel, 2004. "The Earnings Quality Consequences of Announcements to Voluntarily Adopt the Fair Value Method of Accounting for Stock-Based Compensation," Working Papers 0413, College of the Holy Cross, Department of Economics.
- Larry Prather & Ting-Heng Chu & Paul Bayes, 2009. "Market reactions to announcements to expense options," Journal of Economics and Finance, Springer, vol. 33(3), pages 223-245, July.
- Christopher S. Armstrong & Mary E. Barth & Alan D. Jagolinzer & Edward J. Riedl, 2008. "Market Reaction to the Adoption of IFRS in Europe," Harvard Business School Working Papers 09-032, Harvard Business School.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.