Abstract

This paper lays out a comprehensive solution to the problem of accounting for claims based the performance of a firm's stock price. The accounting covers employee stock options, stock appreciation rights, put and call options, convertible debt and preferred stock, warrants, and other hybrid securities. This issue has vexed the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) who have approached the problem on a piecemeal basis, leading to inconsistent treatments of claims that in substance are very similar.

Download PDF

Citation

Ohlson, James, and Stephen Penman. "Debt Versus Equity: Accounting for Claims Contingent on Firms' Common Stock Performance." CEASA White Paper Series, Center for Excellence in Accounting and Security Analysis, New York, N.Y., January 2005.

Each author name for a Columbia Business School faculty member is linked to a faculty research page, which lists additional publications by that faculty member.

Each topic is linked to an index of publications on that topic.