The valuation implications of employee stock option accounting for profitable computer software firms

Accounting Review

Volumn 77, Issue 4, 2002, Pages 971-996

  Bell, Timothy B ^a   Landsman, Wayne R ^a   Miller, Bruce L ^a   Yeh, Shu ^a  

^a NONE

Author keywords

Abnormal earnings; ESO asset; ESO expense; Prepaid compensation asset; Vesting period

Indexed keywords

EID: 0036807059     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.2002.77.4.971     Document Type: Article

References (33)

1. Aboody, D. 1996. Market valuation of employee stock options. Journal of Accounting and Economics 22 (August-December): 357-391.
2. _, and B. Lev. 1998. The value-relevance of intangibles: The case of software capitalization. Journal of Accounting Research 36 (Supplement): 161-191.
3. _, M.E. Barth, and R. Kasznik. 2001. Stock-based employee compensation and equity market values. Working paper, Stanford University, Stanford, CA.
4. American Institute of Certified Public Accountants (AICPA), Accounting Principles Board (APB). 1972. Accounting for Stock Issued to Employees. Accounting Principles Board Opinion No. 25. New York, NY: AICPA.
5. Barth, M.E., W.H. Beaver, J.R.M. Hand, and W.R. Landsman. 1999. Accruals, cash flows, and equity values. Review of Accounting Studies 4 (December): 205-229.
6. _, and _, 2000. Accrual components, earnings forecasting, and equity values. Working paper, The University of North Carolina at Chapel Hill, NC, and Stanford University, Stanford, CA.
7. _, and W.R. Landsman. 2001. The relevance of the value relevance literature for financial accounting standard setting: Another view. Journal of Accounting and Economics 31 (September): 77-104.
8. _, and G. Clinch. 2001. Scale effects in capital market-based accounting research. Working paper, Stanford University, Stanford CA.
9. Business Week. 2002. Executive pay. (April 15): 80-100.
10. Chamberlain, S., and S. Hseih. 1999. The effectiveness of SFAS 123 employee stock option disclosures. Working paper, Santa Clara University, Santa Clara, CA.
11. Dechow, P.M., A.P. Hutton, and R.G. Sloan. 1999. An empirical assessment of the residual income valuation model. Journal of Accounting and Economics 26 (January): 1-34.
12. The Economist. 1999. Share options. (August 7): 18-20.
13. Engel, M. 1997. Long-term incentive plans. In Paying for Performance, edited by P.T. Chingos, 176-209. New York, NY: Wiley.
14. Feltham, G. 1995. Valuation, clean surplus accounting, and anticipated equity transactions. Working paper, University of British Columbia, Vancouver, Canada.
15. _, and J.A. Ohlson. 1995. Valuation and clean surplus accounting for operating and financial activities. Contemporary Accounting Research 11 (Spring): 689-732.
16. _, and _, 1999. Residual earnings valuation with risk and stochastic interest rates. The Accounting Review 74 (April): 165-184.
17. Financial Accounting Standards Board (FASB). 1993. Exposure Draft: Accounting for Stock-Based Compensation. Norwalk, CT: FASB.
18. _, 1995. Accounting for Stock-Based Compensation. Statement of Financial Accounting Standards No. 123. Norwalk, CT: FASB.
19. Hall, B. 1999. Innovation and market value. In Productivity, Innovation, and Economic Performance, edited by B. Ray, G. Mason, and M. O'Mahoney. Cambridge, U.K.: Cambridge University Press.
20. _, A. Jaffe, and M. Trajtenberg. 1999. Market value and patent citations: A first look. NBER Working Paper. Cambridge, MA: National Bureau of Economic Research.
21. Hall, B.J. 2000. What you need to know about stock options. Harvard Business Review (March-April): 121-129.
22. Hand, J.R.M., and W.R. Landsman. 2000. The pricing of dividends and equity valuation. Working paper, The University of North Carolina at Chapel Hill, NC.
23. Hayn, C. 1995. The information content of losses. Journal of Accounting and Economics 20 (September): 125-153.
24. Ittner, C., R. Lambert, and D. Larcker. 2002. The structure and performance consequences of equity grants to employees of new economy firms. Journal of Accounting and Economics.
25. Keating, E., T. Lys, and R. Magee. 2002. The Internet downturn: Finding valuation factors in spring 2000. Journal of Accounting and Economics (forthcoming).
26. Landsman, W.R., and A.C. Shapiro. 1995. Tobin's Q and the relation between accounting ROI and economic return. Journal of Accounting, Auditing, and Finance 10 (Winter): 103-118.
27. Morgenson, G. 1998. Stock options are not a free lunch. Forbes (May 18): 213-217.
28. Ohlson, J.A. 1995. Earnings, equity book values, and dividends in equity valuation. Contemporary Accounting Research 11 (Spring): 661-687.
29. _, 1999. On transitory earnings. Review of Accounting Studies 4 (December): 145-162.
30. _, 2000. Residual income valuation: The problems. Working paper, New York University, New York, NY.
31. Stewart, T. 1997. Intellectual Capital. New York, NY: Currency Doubleday.
32. Vuong, Q.H. 1989. Likelihood ratio tests for model selection and non-nested hypotheses. Econometrica 57 (March): 307-333.
33. White, H. 1980. A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica 48 (May): 817-838.