SFAS 123
SFAS 123 on “Share-Based Payment” regulates the recognition of stock options and similar rights in US GAAP and is comparable to IFRS 2. According to SFAS 123, stock options and similar rights must always be reported at fair value in the balance sheet, with said fair value being allocated as staff expenses over the vesting period. The fair value of the options is to be specified using a recognized mathematical valuation model for finances. Accounting regulations distinguish between equity-settlement and cash-settlement. Fair value on the grant date is decisive for options recognized in accordance with the equity-settlement method. Fair value needs to be re-determined on each reporting date for options recognized in accordance with the cash-settlement method.