Stock Compensation

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Question

How do market conditions affect forfeiture reversals?

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Answer

They do not reverse if service is rendered.

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Question

What measurement basis is used for equity-classified stock compensation at grant date?

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Answer

Grant-date fair value, measured once and not remeasured.

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Question

How are restricted stock and RSUs valued differently from stock options?

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Answer

At the grant-date market price of the shares; no option model is needed.

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Question

Why does liability-classified compensation expense fluctuate over time?

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Answer

Because the award is remeasured to fair value each reporting period.

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