Final answer:
Under iGAAP, stock-based compensation such as shares and options is recognized over the service periods to which employees' services relate, as it aligns the recognition of expenses with the periods in which the related services are rendered by the employees.
Step-by-step explanation:
When it comes to International Generally Accepted Accounting Principles (iGAAP), the fair value of stock-based compensation such as shares and options awarded to employees should be recognized over the fiscal periods that the employees' services relate. This means that the expense associated with stock-based compensation is allocated over the service period for which the benefit is expected to be derived by the employing company. The cost is typically expensed on a straight-line basis unless an alternative method that more accurately reflects the service pattern is justified.
Under iGAAP, stock-based compensation is not recognized all at once, but instead, it is evenly distributed throughout the period that the employee's service affects the company's financial status. For example, if an employee is granted options as part of their compensation package, and these options vest over three years, the fair value of the options will be spread out over that three-year vesting period in the company's financial statements.
The fair value of stock-based compensation should be recognized over the fiscal periods to which the employees' services relate according to iGAAP. This approach aligns expenses with the corresponding periods in which the company benefits from the employees' services.