Offering an equity plan can be a significant benefit helping your company to advance your talent strategy. The ability to properly forecast every part of your budget is critically important to the financial success of your company.
But how exactly does your equity plan administration and forecasting go hand-in-hand? Here are a few things to consider:
Expensing
Accurate accounting of award expenses is imperative. You want to ensure the impact to your financial statements is understood prior to issuance. To do this properly, you need to ensure the correct calculation of fair value and amortization over time showing the impact of these expenses on stock-based compensation. Fair value calculations must also be correct to forecast value at a later date.
Audits
There's a good chance that sooner or later, you will get audited. Being prepared to provide proof that your expenses reflect true numbers makes this process a lot less stressful. The ability to drill down into your reported numbers and the calculations used in your financial reporting means you'll be confident every number reported is certain and verifiable.
Compliance
Ensuring compliance with US GAAP and IFRS 2 accounting standards helps provide certainty that your financial statements are accurate and easily understood. Avoid the concern of having to adjust or restate your financial disclosures by taking necessary compliance steps and planning now.
Outsourcing your equity plan administration to the right provider allows you to forecast the right way, letting you more accurately budget your hard-earned dollars and prioritize your company spend where it's needed most.
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