There are no prerequisites

Course Description

A company may issue shares to its employees or outside parties that are intended to be compensation for past or future services rendered. These payments can take many forms, such as stock grants, stock options, warrants, and discounted employee stock purchase plans. Accounting for Stock-Based Compensation describes the treatment of equity-based compensation that is paid to employees and outsiders, addressing how to account for each of these types of stock compensation, as well as similar arrangements. The valuation and expense recognition for these stock awards is discussed, along with the related concepts of employee stock ownership plans and employee share purchase plans. In addition, the views of the Securities and Exchange Commission in regard to this topic are summarized.


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Aug 30, 2018
There are no prerequisites

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

  • Recognize the basic concepts of stock-based compensation, such as the implicit service period, the derivation of compensation costs, and the classification of an employee.
  • Identify the accounting for unused stock options.
  • Specify the methods used to derive the fair value of stock-based compensation.
  • Recognize the reasons for creating an employee stock ownership plan.
  • State the rules that qualify an employee share purchase plan for special accounting treatment.
  • Specify the positions taken by the Securities and Exchange Commission related to stock-based compensation.

Table of Contents

Learning Objectives


Overview of Stock Compensation

Stock Compensation Valuation and Cost Recognition Topics

Stock Volatility

Characteristics used as the Basis for Fair Value Determination

Fair Value Calculation Alternatives

Changes in Accounting Estimate

Awards Classified as Equity

Award Measurement Problems

Award Modifications

Income Tax Effects

Awards Classified as Liabilities

Employee Stock Ownership Plans

Leveraged ESOP

Non-Leveraged ESOP

Employee Share Purchase Plans

Equity-Based Payments to Non-Employees

Additional Stock-Based Compensation Concepts

Capitalized Compensation

The Leased Employee

Tandem Awards

Dividends Paid on Outstanding Options

Share-Based Awards in an Acquisition

Impact on Earnings per Share

The SEC’s View of Stock-Based Compensation

Stock-Based Compensation Disclosures

Equity-Based Payments to Non-Employees

Employee Stock Ownership Plans


Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation

Choose Your Preferred Format

Online Access

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Hard Copy

Our self-study materials are authored by top-quality, industry experts. You’ll receive a bound notebook of all the course materials, shipped to you within one business day. In addition, you’ll also have full online access. Each self-study package includes a robust collection of learning and reference materials to help you cover the information efficiently and put it into practice immediately.

hard copy
Self-Study Video

Experience high-quality instruction with our Self-Study Videos, available to you 24/7. With more than 80+ videos currently in the Western CPE Self-Study Video library, you can see and hear our expert instructors deliver the information you need in a dynamic way that allows you to immediately apply your learning. Unlike a live course or webcast, you can complete the course on your own time, playing and pausing as needed. Self-Study Videos allow you to complete your CPE requirements on your own time.

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