Options Expense Valuation for ASC 718/SFAS 123R Compliance
Whitehawk Advisory provides valuation for stock option expense calculations in compliance with financial reporting standards (ASC 718 and SFAS 123R). In 2009 the Financial Accounting Standards Board recodified GAAP into the FASB Accounting Standards Codification (ASC). As a result the original requirements for stock option expensing in FAS 123(R) are now described by ASC 718.
These standards include requirements that companies are to determine the basis for the value of the equity (typically using an independent valuation conducted in accordance with IRC Section 409A), track equity compensation activity, calculate the fair value of the stock option expense to the company, and adjust employee income tax deductions. In some cases, the ongoing administration and compliance with this standard can pose a significant burden.
Whitehawk Advisory has significant experience in determining the value of these securities, as well as performing the ASC 718 calculations, and frequently works with clients to determine options expense calculation following the completion of a 409A valuation. We can either complete these valuations directly for a company, or work with our client to implement cloud-based equity management software based upon our partnership with a leading software company focused on this market.