Able Corp. acquires Bailey Company in a transaction that is
properly accounted for as a business acquisition. The acquisition
contract and Bailey’s share-based compensation agreement require
Able stock to be exchanged for Bailey common stock issued
to Bailey’s employees as share-based payments. No further service
is required by the employees of Bailey to qualify for the replacement
awards. How should Able account for the shares of
stock issued as replacement awards to employees of Bailey?