Disclosed Values of Option-Based Compensation - Incompetence, Deliberate Underreporting or the Use of Expected Time to Maturity?

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dc.contributor.author	Bechmann, Ken L.	en_US
dc.contributor.author	Hjortshøj, Toke L.	en_US
dc.date.accessioned	2009-02-04T10:26:14Z
dc.date.available	2009-02-04T10:26:14Z
dc.date.issued	2008-05-16T00:00:00Z	en_US
dc.identifier.uri	http://hdl.handle.net/10398/7143
dc.description.abstract	New accounting standards require ¯rms to expense the costs of option-based compensation (OBC), but the associated valuations o®er many challenges for ¯rms. Earlier research has documented that ¯rms in the U.S. generally underreport the values of OBC by manipulating the inputs used for valuation purposes. This paper examines the values of OBC disclosed by Danish ¯rms. The results suggest that ¯rms experi ence some di±culties in valuing OBC, but interestingly, there is no clear evidence of deliberate underreporting. For example, there is no evidence that ¯rms use manipulated values for the Black-Scholes parameters in their valuations. Furthermore, ¯rms determine the expected time to maturity in a way that is generally consistent with the guidelines provided by the new accounting standards. The ¯ndings di®er from those of the U.S., but is consistent with the more limited use of OBC and the lower level of attention paid to these values in Denmark. However, the di®erences can also be due to the fact that several Danish ¯rms do not provide the information required regarding their OBC, which is clearly a very e®ective way of hiding the true values.	en_US
dc.format.extent	34 s.	en_US
dc.language	eng	en_US
dc.relation.ispartofseries	Working paper;2007-25	en_US
dc.title	Disclosed Values of Option-Based Compensation - Incompetence, Deliberate Underreporting or the Use of Expected Time to Maturity?	en_US
dc.type	wp	en_US
dc.accessionstatus	modt08maj16 nijemo	en_US
dc.contributor.corporation	Copenhagen Business School. CBS	en_US
dc.contributor.department	Institut for Finansiering	en_US
dc.contributor.departmentshort	FI	en_US
dc.contributor.departmentuk	Department of Finance	en_US
dc.contributor.departmentukshort	FI	en_US
dc.idnumber	x656556934	en_US
dc.publisher.city	København	en_US
dc.publisher.year	2007	en_US