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| Author: | Aboody, D. Barth, M.E. Kasznik, R. |
| Title: | Firms' voluntary recognition of stock-based compensation expense |
| Journal: | Journal of Accounting Research
2004 : MAY, 42:2, p. 123-150 |
| Index terms: | Accounting standards Finance Companies Industries Options Stock markets USA |
| Language: | eng |
| Abstract: | This paper investigates 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. It is found 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, there is no significant incremental relation found btw. recognition likelihood and SFAS 123 expense magnitude after controlling for other factors expected to explain the recognition decision. In addition, positive and significant announcement returns for earlier announcing firms are found. |
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