What's the difference between "restricted stock" and "stock options" from accounting perspective?

A quick search on "stock options" shows that many companies are switching from "stock options" to "restricted stocks" as an employee compansation vechicle.





Below is what I learned from my research. It could be wrong though.





The sales of "stock options" are usually reported as loss. It reduces the company's tax liability, but also adversely affects the company's profit. From 2006, most companies are required to disclose the impact of the "stock options" sales to the public.





My questions,





When a company issues "restricted stocks" and the employee sells them, is the proceeding counted as "loss" like "stock options"?





Why companies don't switch until recently? Does it have anything do to with the new SEC reporting requirement?





Thanks,|||A stock option gives the employee the option to purchase shares ofthe stock from the company at a predetermined price.





Restricted stock are shares of the company that have restrictions placed on them (usually when they can be sold).





Companies have switched because starting this year they are required to treat options as an expense. up until this year companies did not have to report options and so they had no effect on earnings. Now, they are treated as an expense, the company has to purchase the shares in order to give sell them to the employee. As options are only excersized if the current pprice is higher than the buy price, this automatically results in a loss for the company.





Restricted shares are new shares that are issued by the company and therefore do not cost them anything.