Employee Stock Options: Tackling Complex Tax, Accounting and Valuation Challenges

Navigating IRC Section 409A, FASB Requirements, and the AICPA's Practice Guide to the Valuation of Options

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, March 17, 2015

Recorded event now available

Program Materials

This webinar will give tax advisors, corporate tax professionals, auditors and valuation professionals a detailed review of the IRS rules and financial accounting standards that impact the reporting, issuance and receipt of employee stock options.

Description

The practice of granting a company’s employees the option to purchase stock in the company is widespread. Employee stock options are either qualified or nonqualified. Each class of options has its own unique set of tax, accounting and valuation rules.

“Fair value” is the required measurement objective for stock options under FASB’s ASC 718 (formerly FAS 123(R)) and is reported as compensation expense by the issuing company. This standard is generally under close scrutiny by financial statement auditors, the SEC and other regulatory agencies.

The IRS requires that options have an exercise price equal to or greater than the “fair market value” of the underlying common stock as of the grant date to avoid harsh tax consequences to the company and to the employee. This is in addition to the normal tax rules for recognition of income and expense.

Listen as our group of experienced advisors provides a detailed review of stock option issues, including valuations of companies with complex equity structures, M&A and IPO matters, financial statement audits and GAAS, required documentation, and fairness opinions.

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Outline

  1. Overview of authoritative guidance: IRC 409A and ASC 718 (formerly 123(R))
  2. Understanding term sheets
  3. Valuation matters
  4. Reporting: tax and accounting standards

Benefits

The panel will explore these and other relevant issues:

  • Qualified vs. nonqualified options
  • Tax and financial statement treatment of options
  • Valuation and audit considerations
  • Recent controversies at Facebook and other companies

Faculty

Jeffrey E. Mead
Jeffrey E. Mead

Partner, Audit
AAFCPAs

Mr. Mead has over thirty years of public accounting experience at national and regional firms.  His practice...  |  Read More

Raphael Meyara
Raphael Meyara

CEO and Co-Founder
AlgoValue

Mr. Meyara is an experienced accountant with expertise in 409A valuations. Prior to establishing his firm, he was...  |  Read More