Fair value of stock options must be determined at grant date using option pricing models and not later adjusted. Fair value of employee stock options must be estimated at the grant date using an option pricing model that accounts for exercise price, expected life, current market price, expected volatility, expected dividends, and the risk free interest rate; that grant date valuation must not be subsequently adjusted. Expected life should include the vesting period and reflect company or peer-group experience, and where trading history is insufficient volatility and dividend inputs may be drawn from comparable peers; significant assumptions must be justified and any later changes explained.