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The primary objective of financial reporting is to provide information to users to assist them in their decision-making process. In order to be useful, accounting rule makers should develop concepts that require companies to report information that is free from bias. But this neutrality objective has been a debatable topic in the area of stock-based compensation (SBC) - employee stock options and restricted shares. Many argued that pronouncements issued by the Financial Accounting Standards Board and its predecessors for SBC provided an opportunity for companies to report "biased" information. This "opportunity" then influenced employee compensation packages adopted by companies. In this paper, we discuss how accounting pronouncements for SBC have evolved over the years and the forces behind the changes. We then use AppleInc. as a case study to demonstrate how these pronouncements impacted the company executive compensation policies. This historical summary can be used as a resource in an accounting theory class to demonstrate how accounting standards change over time, and how external forces influence the changes made in accounting standards.