Incentive stock option
In accounting, incentive stock option means a stock option meeting IRC §422: employees only, granted under a stockholder-approved plan, strike at least fair market value, exercisable for no more than ten years. No regular tax at grant or exercise (the spread can trigger AMT); gain is capital if the stock is held two years from grant and one from exercise. Only $100,000 of stock, valued at grant, may first become exercisable in a calendar year.
Also called ISO.
Authority: 26 U.S.C. §422 (opens in a new tab). Sources
The lesson that teaches this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
Incentive stock option, in use
Quoted from the 4 documents that use the word: what it does to an interface, in the spec's own words.
Intl reports CLDR display digits, and in V8 (Chrome, Edge, Node) about seventeen currencies, including HUF, IDR, COP, PKR and IQD, come back with 0 where the ISO 4217 minor unit is 2 (3 for IQD). currencyScale() carries those exceptions, so HUF 12,345 minor units renders as 123.45 Ft, not 12,345 Ft.
But CLDR's digits are display precision, and for about seventeen currencies they differ from the ISO 4217 minor unit your bank and processor store amounts in.
How to format money in React — 2. Decimal places are per-currency
Every money tool has a Currency field (ISO 4217, default USD) and reads, prints and copies at that currency's exponent from currencyScale(): JPY 0 (1,500,000), USD 2, KWD 3 (1.234).
Lopifi Tools — the accountant's toolbelt — The three non-negotiables
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- NSO
- RSU
Components that render this
These components name it in their spec, grouped and labeled exactly as the catalog shows them.
Also in Equity & financing
Defined in Lexicon. This page is generated from that document, so the two can't disagree.