Stock option accounting is the process of recognizing the value of stock options that have been granted to employees and other stakeholders as a way to reward them for their actions. The goal of such accounting is to accurately reflect the economic impact of these stock options while also giving stakeholders an idea of their true worth. In order to do this, companies must properly recognize the value of their stock options when they are granted, amortize them over their expected useful life, and then adjust their financial reports as the related values change over time. Stock option accounting can be a complex process, but in order to give stakeholders an accurate picture of their options, it’s essential for businesses to stay on top of it.