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Chapter19 Shared Compensation and Earnings per Relearning Objectives After studying this chapter, you should be able to: LO191×Explain and implement the accounting for stock award plans. LO192×Explain
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Share-based compensation is a form of compensation paid to employees in the form of company equity, such as stock options or shares. Share-based earnings refer to the profits generated through the sale or exercise of these equity instruments.
Companies that offer share-based compensation to their employees are required to file reports on these compensation and earnings.
Share-based compensation and earnings should be reported in the appropriate tax forms and financial statements, following the guidelines provided by regulatory authorities.
The purpose of share-based compensation and earnings is to incentivize employees to help drive the company's performance and align their interests with those of shareholders.
Information such as the fair value of the equity instruments, the number of shares granted, vesting schedules, and related expenses must be reported on share-based compensation and earnings.
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