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Strategies & Market Trends : Employee Stock Options - NQSOs & ISOs -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (258)	8/23/2002 4:46:10 PM
From: Exacctnt	Read Replies (1) \| Respond to of 786

<<<<The easier answer is for the financing activities. The employee purchases the stock option from the company and then exercises the stock option. >>>> Not sure what you mean by "employee purchases the stock option from the company". The Financing part of employee options occurs upon exercise, it is a simple issuance of stock offset by cash (grant value). The accounting entry would be to debit Cash and credit Treasury Stock. If no Treasury Stock, the credit would be to Common Stock(at par value) and Additional Paid in Capital. If options were to be expensed, the operational part, then an Options Expense would be debited and probably some type of an Equity Option Compensation account would be credited. <<<< The company grants (gifts) the employee THE EXACT AMOUNT REQUIRED by the employee to purchase the option.>>>> Scratching my head about this statement.