It's a popular practice to issue stock options to employees, particularly for early-stage tech and biotech companies. However, Management should be aware of possible financial consequences if the proper compliance procedures are not followed.
In this white paper we'll discuss:
- Accounting rules adopted in 2005, regarding compensatory option grants, that can significantly impact a companyıs financial processes and result in severe penalties if not implemented properly.
- The key to ensuring that the options are priced accurately, which means the business and underlying security value must be adequately supported and documented. This differs for public and privately-held companies.
- Different option pricing models that FASB will accept, as long as they meet certain criteria and are appropriate to the interest being valued.
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