SOAProjects, Inc. has helped a number of companies (both public and privately held companies) with the initial adoption, ongoing compliance with the requirements of FAS 123(R) including income tax accounting implications. We have issued written reports to document and support management’s position on various matters involving significant estimates and judgments in applying provisions of FAS 123(R). Our reports and work has been successfully accepted by all Big 4 audit firms. Our pool of expertise includes published authors and college-level instructors on the topic.
We facilitate one stop solution to all equity administration and accounting requirements to maximize efficiency at minimum cost. We provide either a customized co-source solution or a complete outsourced solution depending on the requirements/ needs of your company. We can assist in revisiting how the Company measures the fair value of stock options with the adoption of FAS 123 (R). SOAProjects can perform detailed FAS 123R analysis for the Company, which includes a thorough analysis of the cost advantages/ disadvantages and sensitivities of each of the two models Black-Scholes and Binomial Lattice Model, make the recommendation for the appropriate model adoption or changes, and make the presentations to the company’s auditors, company’s audit committee and board of directors. We can also offer stock option advice to employers about alternatives by which to mitigate the expense attributable to their future stock option awards.
FAS 123(R) Accounting Support
USGAAP Support
- Analyzing historical stock information, relevant industry data and peer companies data to support various critical assumptions used in valuation of stock options.
- Appropriate accounting treatment for various kinds of equity grants.
- Appropriate accounting for any modifications of equity grants.
- Quarter end / year end disclosures for financial statements on Form 10Q/10K.
- Stock Compensation related reporting under proxy statement to be filed with SEC.
IFRS -2 Reporting Support – For foreign subsidiaries
- IFRS-2 – Share-based Payment is applicable effective for fiscal periods starting on or after January 1, 2005.
- Statutory accounts of foreign subsidiaries may require reporting under IFRS-2 standards
- We can help bridge the gap from USGAAP FAS 123(R) reporting to IFRS-2 reporting.
Stock Administration Support
- Maintenance of equity database (we work with all major Equity Administration software like Equity Edge, EASi, etc.)
- Interface with HR to update employees, grants, terminations etc.
- Interface with stock brokers for exercises.
- Periodic SEC reporting (Form 4 etc.)
- Interface with transfer agent
- Month end reconciliations and stock options roll forwards
- Audit support for key assumptions for valuation
Income Tax Reporting Support
- Tracking historical APIC pool and tax liability data by individual stock option
- Supporting reports to prepare Income tax/Deferred income taxes related to various equity grants
- ISO- tracking disqualifying dispositions
Why Co-source/Outsource?
Stock Administration
- Economies of scale
- Cost effective Onsite/Offsite back room operations
- Reduce administrative burden of stock administration and financial staff
FAS 123(R), IFRS-2 and Income Tax Reports
- Highly specialized reporting requirements
- Expensive to keep an in-house specialist
- Leverage knowledge/best practices gathered from various clients and Big 4 audit firms
- Not all the data required for reporting/tax calculations is available in standard reporting
- Analysis of historical data is required
- Cost efficient
- Timely reporting and efficiency
