Walmart offers its employees a variety of share based

compensation plans
Walmart offers its employees a variety of share based compensation plans

Walmart offers its employees a variety of share-based compensation plans including stock
options, performance share awards, restricted stock, and restricted stock units. The following is
an excerpt from a disclosure note from Walmart's 2015 financial statements:
Share-Based Compensation
The Company has awarded share-based compensation to associates and nonemployee
directors of the Company. The compensation expense recognized for all plans was $448 million,
$462 million and $388 million for fiscal 2016, 2015 and 2014, respectively. Share-based
compensation expense is included in operating, selling, general and administrative expenses in
the Company's Consolidated Statements of Income. The total income tax benefit recognized for
share-based compensation was $151 million, $173 million and $145 million for fiscal 2016, 2015
and 2014, respectively. The following table summarizes the Company's share-based
compensation expense by award type:

Required:
1. Walmart's share-based compensation includes stock options, restricted stock units, restricted
stock awards, and performance-based awards. What is the general financial reporting objective
when recording compensation expense for these forms of compensation?
2. Walmart reported share-based expense of $448 million in 2015. Without referring to specific
numbers and ignoring other forms of share-based compensation, describe how this amount
reflects the value of stock options.

Walmart offers its employees a variety of share based compensation plans

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