الفهرس 
الإطار العام للدراسةيوجد فقط 14 صفحة متاحة للعرض العام
 |  | from | 192 |  |  |
| | | from | 192 | | |
المستخلص
First: Introduction
In the last decade, firms have increasingly turned to offering employees options and restricted stock (often with restrictions on trading) as part of compensation packages. Some of this trend can be attributed to the entry of young, cash poor technology firms into the market, many of which have to use equity because they have no choice.
However, many larger market cap firms that can afford to pay cash compensation have used stock based compensation as a way of aligning managerial interests with stockholder interests. In this paper, the researcher begin by looking at motives, good and bad, for using equity based compensation and trends over the last few years.
In 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard No. 123 (revised 2004), Share-Based Payments (SFAS 123R), requiring all entities to recognize as expense the fair value of stock options issued to employees for services provided.
Because employee stock options cannot be traded publicly, their fair value must be estimated using a model, with the Black–Scholes–Merton (BSM) and lattice models being the most appropriate alternatives. This teaching note provides an overview of employee stock options, followed by a discussion of the BSM and lattice valuation models, including their application and limitations. A project which has been used in financial accounting courses is also presented. The conceptual discussion coupled with illustrated examples will help students enhance their understanding of fair value estimation of and accounting for employee stock options under the recently adopted SFAS 123R.
Second: Problem of the study
The problem of the study lies in the next question,
”Do the different pricing models applied in estimating the fair value of stock options effect the financial statements?”
And from that question the researcher get the next sub-questions:
1-What are the models which use in pricing the fair value of stock options?
2-What are the differences between each model?
3-What are the problems associated with the process of the stock options valuation?
4-What are the effects of changing the pricing model of stock options on the financial statements?
Third: The Research objectives
The main objective of the study is ”Determining the impact of pricing models applied to estimate the fair value of stock options on the financial statements”
This objective can be achieved through realizing the following sub-goals:
1-Clarifying the concept of stock options and their uses.
2-Studying the problems and risks associated with stock options.
3-Studying the pricing models which can be used to estimate the fair value of stock options and the differences among their effects.
4-Studying the effects of changing the pricing models on the financial statements.
5-Conducting an empirical study to compare the results of each model of stock options’ pricing models. Fourth: The importance of the study
This research derives its importance from both scientific and practical sides
a)the scientific perspective:
There is a dearth on this area, which means that the research represents a scientific addition to the Arabic library in accounting.
b)the practical perspective:
It lies in the attempt of showing the effect of changing the pricing model of the stock options’ fair value on the financial statements.
Fifth: variables and hypotheses of the research
1- Variables:
A)The Black-Scholes model
It is an option-pricing model that employs the following variables:
• Stock price at grant (S)
• Exercise price (K)
• Expected life of the option (T)
• Continuously compounded risk-free rate of return over the expected life of the option (r)
• Continuously compounded expected rate of dividend yield (d)
• Expected volatility of the stock (sigma)
B)The binomial model
The binomial model employs similar variables to those used in the Black-Scholes model.
•Stock price at grant (S)
•Stock price at a particular node (S(i,j))
•Exercise price (K)
•Expected life of the option (EL)
•Continuously compounded risk-free rate of return over the expected life of the option (r)
•Continuously compounded expected continuous rate of dividend yield (d)
• Volatility of the stock (sigma)2- hypotheses:
A)There is a fundamental difference between the pricing models used to estimate the fair va of the stock options.
B)The stock market value affects the exercise price of stock options.
C)Including the cost of the stock options in the expenses side of the income statement effects on the investors.
D)Changing the pricing model of stock options effects the financial statements.
Sixth: Research Methodology
The study based on two basic axes:
Axis I: The theoretical and official axis,
It Will follow this axis to cover the theoretical background which the study based on and that will be done through a review of the most important literature and scientific earlier efforts on this subject and this axis will be relying mainly on the sources of scientific references, periodicals, reports, conferences, seminars and other, both foreign or Arabic relevant to the research topic.
Axis 2: The applied axis,
It conduct a study designed to gather the necessary information to compare each model of pricing models applied to estimate the fair value of stock options and find out their impact on the financial statements to validate the hypotheses.