Every day, we hear from CFOs and others who are responsible for equity compensation reporting that they wish there was a resource that made it easier to understand and look up a few calculations, terms, or disclosures related to ASC Topic 718. They can search through a help file or meander through articles on the web, but it just seems to take too much time. Frequently, these people only have to dig out their equity compensation spreadsheets and reports once a year, so it’s forgotten by the time they need to do it again the following year. It’s frustrating and inefficient.
To address that concern, Corporate Focus recently released an eBook: Equity Compensation Reporting: A Handbook of Terms. It is filled with short, clear explanations and definitions for the basic terms, calculations, and disclosures that are required for privately-held companies with stock option plans to properly report their equity compensation expense under ASC Topic 718 (formerly FAS 123R). It is divided up into three sections:
- Valuation terms, including the Black-Scholes formula, expected term, and volatility;
- Expensing terms, including actual fair value, requisite service period, and forfeiture rate; and
- Disclosure terms, including those related to valuation summary, option activity, and expense recognition.
So, the next time you need to understand how to calculate a Black-Scholes valuation variable like “peer company volatility” or a calculate a disclosure item like “Weighted-Average Period to Recognize Unrecognized Compensation,” feel free to download a free copy. Let us know what you think.
And, if you ever get fed up with equity compensation reporting using your own spreadsheets and feel like tossing the whole 45-page eBook in the “recycle bin,” let us know and we’ll show you how you can do everything that’s described in the book in less than an hour with an equity administration and reporting system like Corporate Focus.