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how is compensation from the exercise of nonstatutory stop options reported to an employee

how is compensation from the exercise of nonstatutory stop options reported to an employee

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Answer #1
For Accounting point of view compensation shall be excess of fair market value over the excer price at grand date as per intrinsic value approach.
Refer SFAS No.123.
At Non Statutory Stock Option is exercised, ordinary income tax applies. The tax is determined by the
difference between the fair market value of the shares and the exercise price. This is the compensation income reported on which tax to be paid.
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