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Financial reporting valuation and ASC 718 (SFAS 123R)

Financial reporting valuation and ASC 718 (SFAS 123R)


ASC 718 [previously SFAS No. 123(R)] mandates that companies must expense stock options and other forms of equity based employee compensation. Among other things, they must provide the basis for the value of the equity (often an independent valuation), track all equity compensation activity, calculate fair value, and adjust financial statements accordingly. Depending on the number of employees receiving awards, the frequency of grants, and the variability of the terms, ongoing administration and compliance can pose a significant burden. Armanino has in-depth expertise in determining the underlying security’s value, performing the  ASC 718 calculations and administering a Company’s cap table.