Stock Option Accounting - The Longest Footnote Understood by the Fewest People"
Stock options, once considered by corporate managements to be "costless" compensation and a powerful incentive to retain and incent staff, have since become one of the more complex elements in a company's financial statements, spawning behavioral changes in how companies regard equity-based compensation.
Accounting for stock options has continued to both fascinate and mortify a generation of CFOs, controllers, accountants... and, ultimately, the CEOs of their companies. From the CEO to the most junior accountant, all are now aware that stock options are no longer free if, indeed, they ever were. The net impact of the accounting rules on companies' financial statements has literally changed the way companies and their boards make decisions on how much and what kind of equity-based compensation to award to their executives and other staff.
The complexity in the accounting rules has also spawned a new industry catering to the needs of companies who cannot afford the time or training to deal with all those complexities on their own
What began in the 1990s as a debate over how to reflect the value of stock option grants in financial statements--with heatedly differing viewpoints among many competing constituencies--soon became codified as FAS 123, which then morphed into FAS 123R, in turn more recently reincarnated as "FASB ASC Topic 718 - Stock Compensation".
The change from FAS 123R to ASC 718 was essentially a name change. But the issues remain the same -- and controversial. Whenever there is a change of any kind in equity compensation accounting, it brings people out of the woodwork, wanting, once again, to try to master the great mysteries of equity-based compensation reporting.
Our speaker, Jeff Onesto, will review and de-mystify for us the issues in ASC Topic 718. He will explain some of the intricacies of stock option accounting, as well as other issues in equity-based compensation.
Jeff will give an overview of the following important topics that anyone involved in stock option accounting would be well advised to know:
- Trends in equity-based compensation
- Trends in technology
- GAAP/IFRS convergence
- SEC investigation of Facebook: What CFOs need to know!
Speaker
Jeff Onesto, CPA Director of Product Management of OptionEase in Mission Viejo
About Jeff Onesto, CPA
Jeff is the Director of Product Management for OptionEase, the software-as-a-service (SaaS), share-based, compensation services provider located in Orange County. OptionEase is now in its fifth year of operation, with over 500 client companies. Jeff's background includes public accounting as well as private industry experience, management consulting with Price Waterhouse, enterprise software sales and delivery within the Oracle (JD Edwards) and Microsoft eco-systems, and bringing Web 2.0 solutions to the middle-market.
Jeff got his BA in Accounting from Cal State Northridge, subsequently earning his CPA certification. He is one of the most knowledgeable people you will ever get to meet regarding equity based accounting -- and he is also someone who can translate it all into plain English.
He was earlier well-received as a speaker at the Orange County chapter of the FENG, and we are most pleased to welcome him to San Diego.