Successful Strategies for Equity Compensation
A successful approach to equity compensation accounting and reporting requires a sound strategy in four major areas:
Data
Problems with your stock administration system data can impact your compliance with GAAP reporting and SOX controls. Our review and quality testing procedures ensure that your dataset is complete, consistent, and correctly formatted to guarantee accurate reporting results the first time. Our reconciliation procedures identify anomalies that threaten data integrity across reporting periods, avoiding lengthy correction processes. Changes in data that could result in modification accounting are identified and properly addressed.
Assumption Development and Valuation
Our proprietary models calculate valuation assumptions that incorporate historic data and future expectations, thereby complying with the letter and the spirit of the guidance. With these inputs, our system calculates award fair values utilizing the modified Black-Scholes-Merton method. Financial Intelligence adds value to your equity compensation reporting solution by providing these consulting services in conjunction with your periodic reports.
Financial Reporting
We can provide reporting around your existing legacy platform, or seamlessly convert your data and report through our alliance with Equity Administration Solutions, Inc. (“EASi”), the new standard in equity compensation accounting and reporting software. Through this partnership, we offer the most comprehensive SAS 70 type II certified suite of FAS 123R reports including:
- Fair value of new grants
- Expense accrual and forecasting
- Deferred tax transactions and DTA tracking
- Summary APIC pool effect
- Common Equivalents (treasury method)
- A240 Disclosures
- Proxy disclosures, including the new SEC requirements
These reports are delivered in both a non-editable PDF format suitable for presentation to your auditing firm, and in an Excel format for internal analysis. If you need a custom report, we will build it for you.
Our formal, proven methodology is used in initial conversion activities and can accept data sets in any format from any stock administration system. During all conversion processes, we reconcile the to-date calculations between your prior results and our reporting platform.
Audit
At Financial Intelligence, we proudly stand behind our results and will work with your auditors. We provide complete documentation that clearly supports the calculations, is SOX compliant, and that gives ultimate transparency.