Eligibility. The removal of the APB 25 variable-accounting requirement with FAS 123R has expanded the eligibility for SARs. Freestanding SARs settled in stock may be even more advantageous than stock options because of less dilution for appreciation of less than 100 percent.
Frequency. The SAR is typically attached to the stock option at time of grant. If granted later, the fair-value expense charge would be determined at date of grant. Typically, this action would be because of low stock-price appreciation and wanting to avoid the executive having to put up the cash and experience the downside risk of a falling stock. But with cashless exercises available, this later-date grant is avoided.
FASB Interpretation No. 28 (1974) stated that if both ...
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