Nonstatutory Options (also known as Nonqualified Stock Options (NQSOs or NSOs)):

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Nonstatutory Options (also known as Nonqualified Stock Options (NQSOs or NSOs)): The exercise of a NQSO results in a tax deduction for the grantor equaling the intrinsic value of the option when exercised. As a result, income tax accounting is required when compensation cost is recorded in the financial statements for NQSOs that are granted. Refer to Q&A 59-3 for the definition of a NQSO. Question What is an incentive stock option (ISO)?

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