equity

equity-based compensation

Tax Implications of Equity-Based Compensation

Equity-based compensation is a powerful tool for attracting, retaining and motivating executives and other employees. By rewarding recipients for their contributions to your success, it aligns their interests with those of the company and provides them with an incentive to stay. Here’s a look at some of the more common types. Incentive stock options Stock…

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financial restatements

Why do Companies Restate Financial Results?

Every year, research firm Audit Analytics publishes a study about financial restatement trends. In 2018, the number of public companies that amended their annual reports increased by 18%. Many of these amendments were due to minor technical issues, however. Of the 400 public companies that amended their returns in 2018, only 30 amended 10-Ks (or…

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liabilities and equity

Simplifying the Accounting Rules for Convertible Debt and Equity

Distinguishing between liabilities and equity on a company’s balance sheet may seem straightforward. But difficulties arise when it comes to the terms of complex securities and financial contracts like redeemable equity instruments, equity-linked or indexed instruments, and convertible instruments. The good news is that the Financial Accounting Standards Board (FASB) is currently working on a…

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nonemployee stock compensation

How to Report Stock Compensation Paid to Nonemployees

The accounting rules for reporting stock compensation have been expanded. They now include share-based payments to nonemployees for providing goods and services, under recent guidance issued by the Financial Accounting Standards Board (FASB). Old rules Under existing U.S. Generally Accepted Accounting Principles (GAAP), the FASB requires businesses that give stock awards to independent contractors or…

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