Which of the following statements is true regarding share appreciation rights (SAR) payable in cash?
A) Changes in estimated total compensation are recorded as prior period adjustments.
B) The amount of compensation under the SAR plan is unknown until the rights are actually exercised.
C) At the time of exercise a participant may receive either cash or common stock.
D) Deferred compensation expense is recorded at the time the share appreciation rights are granted.
Answer: B
Business
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