When issuing convertible bonds, call options are often granted to investors. In 2020, call option clauses were included in about 87% of all convertible bond issuances (Financial Services Commission, 2021). Recently, call options on convertible bonds have been granted by designating a third party after issuance, in addition to being granted directly to investors. Third parties are mostly the largest shareholders and related parties. Traditionally, assigning call options on convertible bonds to a third party has been treated as the transfer of embedded derivatives, with related gains and losses classified as nonoperating. Fasoo, a case company in this study, initially followed this practice. However, after making an inquiry to the Financial Supervisory Service, they received a reply that the call options designated to employees and the employee stock ownership union have the same economic substance as stock options. In other words, the Financial Supervisory Service is of the opinion that it is appropriate to apply stock-based compensation accounting at the time when a company designates a call option for its employees and employee stock ownership union. As a result, Fasoo applied the stock compensation standard when designating a call option on convertible bonds, resulting in a significant decrease in operating profit and net profit. Due to a change in accounting treatment when designating a call option, Fasoo has turned from a profitable company to a loss-making company. This study highlights how the accounting treatment can differ depending on the party designated for the call option and provides insights into convertible bonds and call options.