Under FAS 123, companies may continue to record options using the APB 25 intrinsic value method; But, they were required to disclosed in their footnotes what would have been t…he full expense effect of the options, calculated using the fair value method..
Under FAS 123R, companies may no longer use the intrinsic value method. The end result is that companies that issue stock options will now have to record an expense for what they had previously only had to disclose. They are also required to record expense for any outstanding unvested options. In addition, FAS 123R no longer permits companies to account for forfeitures as they occur. Companies will be required to estimate their forfeiture rate and record expense net of estimated forfeitures..
In other words, FAS 123 required disclosure, while FAS 123R required recognition. ( Full Answer )