As part of our recent acquisition the acquiring company agreed to pay out the value of our unvested options over a 2 year period (50% at year 1 and 50% year 2). Similar to a retention bonus you need to be employed at year 1 and year 2 to receive it. There seems to be some disagreement over the timing of the expenses and looking for opinions as to the proper GAAP treatment. As an example at the acquisition date the employee is eligible to be paid out $24 for unvested options, $12 at the end of year 1 and $12 at the end of year 2. Should the accrual of this liability be: a) $1 per month for the next 24 months. The logic for this one is matching the expenses to the payments over the two year period. b) $1.50 per month for the first 12 months and $0.50 for the last 12 months. The logic for this one is that the employee is fully accruing the first year payout in year 1 and 50% of the year 2 payout. Looking for what GAAP says here as this is for a public company. Appreciate any help here.