Are you struggling with the challenges brought on by Financial Accounting Statement 123(R)? If you are, you’re not alone.

One of the leading global accounting, tax and business advisory organizations, Grant Thornton LLP, recently reported that some of the implementation issues technology company executives continue to face include “methods for valuing stock options, applying an accurate forfeiture rate assumption to compensation cost, and reconciling the effect of 123(R) on income taxes.”

Grant Thornton LLP surveyed finance and accounting executives at 104technology companies (75% were public) on how technology companies are using and accounting for stock-based compensation. Here are some of their findings:

• 85% report that the overall process of option valuation is significantly more complex than it was before Statement 123(R).
• 76% say they are outsourcing option valuation as a result of this increased complexity and scrutiny.
• 59% of companies report an increased involvement of their compensation committee in designing their compensation programs.
• 58% indicate that reconciling the tax benefit for awards that were partially or fully vested upon adoption of 123(R) is challenging or burdensome.
• 56% find the grant-by-grant reconciliation of the option exercise tax benefit to be challenging and burdensome.
• 35% reported granting restricted stock in the first year post-adoption of 123(R).

If you would like to learn some practical tips on how the FAS 123Rvaluation and expensing rules apply to non-public companies, you can download Two Step’s on-demand webinar “Straight Talk on FAS 123R Compliance: 5 Things Your Auditors Will Want to Know.”

Leading industry experts Peter Suzman of FAS123 Solutions, LLC and Brock Benson of iComp LLC joined Two Step to present this webinar to help make the audit process easier for non-public companies. During the presentation, we discuss key issues facing chief financial officers including the pros and cons of the Black-Scholes formula, how to determine key valuation inputs, use of forfeiture rates, and managing the related corporate governance documentation.

If you’re struggling with FAS 123R, take an hour to watch the webinar or download the related white paper: A Five Step Framework to Create Auditable Stock Option Records and Comply with FAS 123R. You can download them anytime and of course they’re free.