Assumption Development
FAS 123R requires that award valuation assumptions go further than merely extrapolating historical trends. Assumption inputs of expected term, volatility, and forfeiture rates should reflect management’s expectations about business trends and assessments of unusual historical events and conditions for inclusion or exclusion in the calculations. Developing these inputs, therefore, requires regularly assessing the state of your business, industry and economic trends, and management’s expectations about the future. We help you think through these areas, apply the guidance as appropriate, and incorporate a proper balance of historical data with future expectations in your assumptions.
We provide all of the summary and detailed calculations with custom-written whitepapers to document the methodologies. We communicate with you on a regular basis, and discuss our findings with your auditors as needed.