ACTG 2011 Lecture Notes - Lecture 10: Employee Stock Option, Hybrid Security, Equity Method
Document Summary
Employee stock option - treated as salaries expense (increase to expenses) Hybrid security - shared debt and equity characteristics. Debt - obligation to pay at the end (check picture) They have these characterisics of debt, equity, and conclude which you would choose. Equity over debt if it"s likely owners will want to convert to shares to be in better position. Discuss whether it would be control or significance. Board of directors has 3 members out of 5 come from your company (easy to influence through representation) Our share of net income 390 000, our share of dividend = 30 000 (100 000 x 0. 3: je to record original investment debit investment in irvine, credit cash (10,000,000 asset, balance sheet. Value of the cost of the investment plus the company"s share of net income less the dividends recieved. Total on balance sheet = 10 360 000. Fletwode"s share of income of irvine = 000.
