ESOP Financials

As a corporate organization, you would always want to ensure that the costs associated with your equity compensation Plan is appropriately estimated and accounted for. The accounting value is derived using the option pricing model. This model is based on inputs used under various assumptions. ESOP Direct assists you in the valuation of your Option, its Accounting along with required compliance and disclosures as per Indian GAAP, IND AS, IFRS, US GAAP, FAS 123, SFRS and others standards established by applicable agencies.

ESOP VALUATION

Option Valuation

Correct valuation of the equity compensation Plan is vital. Estimating the cost associated with your Plan is a matter of expertise and may have far reaching repercussions on the financial figures of the company. The accounting value is estimated with the help of option pricing model which is based on various inputs and assumptions. ESOP Direct possesses the required prowess in option valuation to help you identify the best cost effective model of ESOP.

Accounting Treatment

  • Evaluation of employee compensation cost under intrinsic and fair value
  • Amortization as per IGAAP or other standards
  • Tracking of subsidiary/SBU information for tracking transfer cases and allocation of cost to relevant subsidiaries/SBUs

Transition to IFRS

  • Calculation of impact due to change in GAAP
  • Analysis of alternative valuation models
  • Impact of Plan parameters on future accounting cost

Reporting and Disclosures

  • Automated disclosures as per SFRS
  • Employee level costs to help in cross charge and reporting at division level.

FINANCIALS SERVICES

ESOP Direct undertakes share valuation of unlisted companies, necessary to arrive at the fair market price of stocks at the time of grant of options. This helps in determination of exercise price of options (at market price or discount), as it forms the basis for computation and for booking expenditure under intrinsic value or fair value method.
We also take up share valuation for the purpose of tax calculation at the time of exercise of options of an unlisted company.

We would be happy to be of assistance to you.

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