Auditing Public Companies   Term Paper ID:42757 Click to get this paper

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Paper Introduction: auditing publicly traded companies share-based payment reporting generally accepted accounting principles Name Facts The reporting of share-based payments to employees or in someinstances to non-employees is governed in part by Generally AcceptedAccounting Principles GAAP Share-based payments are payments that aremade in the form of equity shares in a publicly traded company Reportingrequirements cover but are not limited to issues such as a valuation b timing and c disclosures Many publicly traded companies engage inshare-based payment activity holder Financial Accounting Standards Board Thus Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. All transactions will be accounted for on the basis of the fair value of the consideration received or on the fair value of the equity instruments issued 2. The specific requirementsplaced on publicly-traded companies in relation to such transactions are asfollows (Financial Accounting Standards Board, 1995, 2 2, 2 4; FinancialAccounting Standards Board, 2 2): 1. Stamford, CT: Financial Accounting Standards Board.Financial Accounting Standards Board. (1995, 2 2, 2 4). auditing publicly traded companies: share-based payment reporting &generally accepted accounting principles____________________________________________________________Name:____________________________________________________________Facts The reporting of share-based payments to employees or in someinstances to non-employees is governed in part by Generally AcceptedAccounting Principles (GAAP). Statement of financial accounting standards No. No compensation cost will be recognized for equity instrument awards for which employees do not provide services 4. 123 (Financial Accounting Standards Board, 1995,2 2, 2 4) and (b) Statement of Financial Accounting Standards No. 123-R (Financial Accounting Standards Board, 2 4). Thus, the development of expertise in the accounting treatment ofsuch payments is essential for firms that audit publicly traded companies.Issues Issue #1: Issue #1 is the accounting for transactions in which anentity obtains employee services in return for share-based payments(Financial Accounting Standards Board, 2 4). 123 (revised): Share-based payment. Statement of financial accounting standards No. (2 2). 148(Financial Accounting Standards Board, 2 2). Thespecific requirements placed on publicly-traded companies in relation tosuch transactions are as follows (Financial Accounting Standards Board,2 4): 1. Financial statements must disclose any effects of these transactions on reported financial resultsReferencesFinancial Accounting Standards Board. Cost of services received will be based on fair-value of equity instruments on the grand date 2. Quoted market prices are the best evidence of fair value and quoted prices will be used when available; otherwise fair value estimates will be based on the best information that is available 4. 123: Accounting for stock-based compensation. Cost will be recognized over the period in which the employee is required to provide services in exchange for the award 3. Reportingrequirements cover (but are not limited to) issues such as (a) valuation,(b) timing, and (c) disclosures. Grant-date fair value will be determined by estimations involving the application of option-pricing models 5. Cash retained as a consequence of excess tax benefits will be included in statement of cash flows Issue 2 - accounting for share-based payment transactions with partiesother than employees: Accounting for share-based payment transactions withparties other than employees is governed by (a) Statement of FinancialAccounting Standards No. Share-based payments are payments that aremade in the form of equity shares in a publicly traded company. Issue #2: Issue #2 is the accounting for share-based paymenttransactions with parties other than employees (Financial AccountingStandards Board, 1995, 2 2, 2 4).Analysis of Applicable Authority Issue 1 - accounting for transactions in which an entity obtainsemployee services in return for share-based payments: Accounting fortransactions in which an entity obtains employee services in return forshare-based payments is governed by Statement of Financial AccountingStandards No. Statement of financial accounting standards No. Excess income tax benefits to the company will be recognized as additional paid-in capital 6. Many publicly traded companies engage inshare-based payment activity holder (Financial Accounting Standards Board,2 4). Stamford, CT: Financial Accounting Standards Board.Financial Accounting Standards Board. (2 4). Stamford, CT: Financial Accounting Standards Board. 148: Accounting for stock-based compensation: Transition and disclosure. The fair value of the equity instruments issued will be used if such estimates are more reliable than estimates of the fair value of the consideration received 3. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.