Exploring three key takeaways from PwC and FERF’s 2016 Revenue Recognition survey, this post will help you assess where your company stands as the implementation deadline looms nearer.
In a recent poll, Certent surveyed a cross section of public and private company webinar attendees to find out what participants felt was their biggest challenge associated with year-end close. Over a quarter of all attendees agreed that the time crunch makes navigating year-end close significantly more challenging. In order to beat the year-end squeeze, there are a few activities that you and your team can plan ahead of time.
On June 8th, 2015, The Financial Accounting Standards Board (FASB) issued an exposure draft detailing the proposed amendments to the current employee share-based payment accounting standards as part of an initiative to reduce complexity surrounding the current accounting standards. As stated in the exposure draft, the FASB feels that, “The objective of the Simplification Initiative is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements.” Here are a few of the main provisions and what they could mean to your current ASC 718 processes.
Making changes to your equity plan is not an overnight process. This laborious task involves many internal and external parties and several steps along the way. It will take some time to determine a proposal of changes and evaluate what is best for your company and your employees. It is critical to develop an equity plan that is attractive to top talent, but it is essential to keep in mind any cost prohibitions, communication challenges, and ongoing maintenance. Below are some common changes companies make to their equity plans, as well as various impacts on accounting and information to help you determine how your employees will be affected.
Finalized in April 2007, Internal Revenue Code section 409A regulates the tax treatment of nonqualified deferred compensation, whether paid to executives or any employee. Under Section 409A, a stock option that is granted with an exercise price less than the fair market value of the common stock determined as of the option grant date requires the companies to withhold applicable income and employment taxes at the time of option vesting. This immediate taxation can be avoided by pricing the stock options at fair market value at the time of granting.
Equity compensation is an essential tool for attracting and retaining top talent and motivating employees to think like shareholders and share in the long-term value they help create. Unfortunately, the accounting and reporting requirements of these programs can also make for an intensive reporting burden. Read on for a few best practices to minimize the financial reporting hurdles of share-based compensation.
I have spoken to thousands of public companies over the last 15 years in the equity compensation business and I have heard a lot. The thing that still surprises me more than anything is the number of companies using Excel for stock plan administration and/or accounting. Sometimes companies are unable to justify the expense of using the latest technology or are just not aware of the solutions that are out there, but either way it is time to start looking.
Less costly? Less complex? And authored by FASB? Inquiring minds at private companies want to know how suggested changes in measuring equity, as well as liability-classified awards, might make their lives easier. The Private Company Council (PCC), advisory body to the FASB representing the interests of privately-held companies with respect to U.S. GAAP, influenced the Board in October 2014, to add a “Simplification” project to its agenda.
Filing with the SEC is complex, time consuming and high stakes. XBRL and EDGARized HTML reports serve as an official declaration to the public of the financial health of your company. As a member of the compliances services team at Certent with extensive SEC and XBRL knowledge, I understand the importance of telling an accurate financial story.
Gear up for your Q1 close with us March 25th-27th at the 2015 Certent Summit at Disney’s BoardWalk Resort in Lake Buena Vista, Florida. Our annual user conference, now in its fourth year, promises to be the best yet with inspirational keynote speakers, new breakout session topics, complimentary one-on-one equity compensation and financial compliance consulting and much more.