For too many companies, the task of tracking, monitoring, and reporting on equity compensation falls across multiple functions and systems, introducing risk into equity compliance. Upgrade your processes for deriving the valuation, expensing, disclosure and tax calculations to ensure accuracy. Accounting for Equity Compensation: A Primer, reviews the five key steps that you can take to properly account for your equity compensation program.
It’s that three-month treadmill that financial pros know all too well. Another fiscal quarter wraps up, precipitating an all-hands-on-deck frenzy of activity to close the books, complete the statutory filings, create the reports – and meet ever-stricter standards for regulatory compliance. It has never been a simple process. And thanks to ASC718, the compliance hurdles are even greater.
Accounting for equity compensation is complex, and ensuring regulatory compliance with ASC718 guidelines is critical. This whitepaper discusses the five key steps you should take to properly account for your equity compensation program including:
- Determining the valuation - including different valuation methods and parameters
- Making your expensing decisions including fixed vs. variable accounting, straight line vs. graded amortization and forfeiture rates
- Calculating your corporate taxes - with discussion on deferred tax assets and the APIC calculation method
- Accounting for dilution
- Preparing your disclosures
With the right knowledge and a robust system in place, accounting for equity compensation and ASC718 requirements can be completed with greater efficiency. The accounting processes outlined in this whitepaper will save you and your team time and reduce the annual audit fees that you may incur for review of this disclosure. A solid system and process ensures ongoing accuracy and compliance, even as employees transition and responsibilities shift to new team members.
Download Accounting for Equity Compensation: A Primer and share it with your team today!