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The cost of an option grant should be expensed over the time, typically the vesting period, when the motivated and retained employee is presumed to be earning the grant by generating additional revenues for the company. Expenses should be matched with the revenues associated with them.
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They want the reported cost deferred until it can be precisely determined-namely when the stock options are exercised or forfeited or when they expire.īut deferring recognition of stock option expense flies in the face of both accounting principles and economic reality. The opponents of expensing, however, continue to fight a rearguard action, arguing that grant-date estimates of the cost of employee stock options, based on theoretical formulas, introduce too much measurement error.
NAMELY STOCK HOW TO
Now that companies such as General Electric, Microsoft, and Citigroup have accepted the premise that employee stock options are an expense, the debate on accounting for them is shifting from whether to report options on income statements to how to report them. At the end of the vesting period, the company uses the fair value of the vested option to make a final adjustment on the income statement to reconcile any difference between that fair value and the total of the amounts already reported. The amortization of prepaid compensation is added to the change in the option grant’s value to provide the total reported expense of the options grant for the year. The prepaid-compensation account is then expensed through the income statement, and the stock option account is adjusted on the balance sheet to reflect changes in the estimated fair value of the granted options. On the asset side, companies create a prepaid-compensation account equal to the estimated cost of the options granted on the owners’-equity side, they create a paid-in capital stock-option account for the same amount. The mechanism involves creating entries on both the asset and equity sides of the balance sheet. The method captures the chief characteristic of stock option compensation-that employees receive part of their compensation in the form of a contingent claim on the value they are helping to produce. The authors present a new accounting mechanism that maintains the rationale underlying stock option expensing while addressing critics’ concerns about measurement error and the lack of reconciliation to actual experience.Ī procedure they call fair-value expensing adjusts and eventually reconciles cost estimates made at grant date with subsequent changes in the value of the options, and it does so in a way that eliminates forecasting and measurement errors over time. Here the data and the metadata are provided in a structured and consistent form as "tidy data".Now that companies such as General Electric and Citigroup have accepted the premise that employee stock options are an expense, the debate is shifting from whether to report options on income statements to how to report them. In addition to using the layout-oriented formats XML and XLSX, you can also store the tables in a CSV format, namely the "Flat File CSV Format", which is suited very well for further processing. In addition to viewing tables by using the web interface, the tables containing results can be downloaded from there. Interface descriptions are directly provided in GENESIS-Online.
NAMELY STOCK SOFTWARE
Web services are designed for software systems which exchange data in an automated manner and/or access functions on remote computers - rather than for human interaction.īy using the GENESIS web service, the GENESIS-Online stock of data can be integrated into automated processes.Ĭurrently we offer two interfaces/APIs that can be used with a variety of methods: "Web service" means the automated execution of processes between applications on the internet.
NAMELY STOCK FREE
As a matter of fact, GENESIS-Online can be used free of charge and without registering under the "Data Licence Germany - Namensnennung - Version 2.0".Īll users have access to the same range of data. The GENESIS-Online database of the Federal Statistical Office contains a wide range of tables which you can configure according to your needs.