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Equity Compensation Valuation - Best Practices, Model Selection, Assumption Development, Success in External Audit


‐ Jul 21, 2010 9:45am


Credits: None available.

Four years after the adoption date of Accounting Standards Codification Topic 718 (ASC Topic 718, previously SFAS 123R), numerous challenges continue to plague companies related to the application of fair value measurement techniques. The continuing growth in performance-based pay creates particularly acute valuation requirements given how standard option-pricing models are typically ill-suited; this is compounded by the fact that these awards are typically issued to senior executives in large quantities. Even in plain vanilla cases, the selection of an appropriate option-pricing model, careful development of the key input assumptions, and defense of this process to the external audit team can be non-trivial. This session will provide an overview of best practices and common risk areas that financial executives should consider when developing equity compensation valuations.

Credits

Credits: None available.