The case explores issues concerning accounting for stock options and executive compensation through discussion questions. Theory is linked to a real-world situation by having students reference IBM?s 1998 annual report. A summary of SFAS No. 123, links to related articles and downloadable spreadsheet template for valuing stock options are also provided.
Type of Material:
A web browser and the ability to download large files. Internet Explorer is recommended as well as required plug-ins in order to view all materials.
Identify Major Learning Goals:
This case has the following goals: 1) to develop an understanding of stock options on executive compensation, 2) to determine conceptual issues associated with stock option plans, 3) to discuss GAAP as it relates to accounting for stock options and 4) to compare the fair value approach to the intrinsic value approach.
Target Student Population:
College students ? intermediate financial accounting or higher. It could also be used in a course on financial statement analysis.
Prerequisite Knowledge or Skills:
One needs some knowledge of basic accounting.
It is a nicely designed text based site.
Locating all relevant material can be quite time consuming.
Potential Effectiveness as a Teaching Tool
There is xcellent integration of textbook theory with original pronouncement, journal articles, and real-world situation. The module promotes discovery learning and critical thinking skills development in areas of analysis, interpretation, evaluation, inference, and explanation.
Teaching notes are not available to facilitate instructor?s use.
Ease of Use for Both Students and Faculty
Good use of hotlinks to draw together professional documents and media accounts. Contents of ?Another Summary? could be used as overhead transparencies and includes mathematical examples.
Potential time-out problems could occur in downloading the IBM annual report which is a critical piece of information. Unspecified plug-ins are required for viewing all documents.
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