hard · Financial Accounting
During a period of rising stock prices, a company's stock-based compensation (SBC) strategy results in a significant 'excess tax benefit' at the time RSUs vest.
According to ASU 2016-09, how does this excess benefit affect the Statement of Stockholders' Equity?
- It increases Net Income, which subsequently increases Retained Earnings
- It has no effect on equity until the underlying shares are sold by the employees
- It is recorded as a direct credit to Additional Paid-In Capital (APIC)
- It is recorded as an increase in Accumulated Other Comprehensive Income (AOCI)
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