Employee Share Plans – Introduction
The way in which companies account for employee share plans has changed dramatically over the last couple of years. The introduction of IFRS2 (issued by the International Accounting Standards Board in February 2004) and its UK equivalent FRS20 has moved the focus of the accounting charge from a simplified "intrinsic value" (the share price minus the exercise price of the option) approach to a more transparent, but also more complex, "fair value" approach.
A solution tailored to your needs
The characteristics of different share plans vary widely, as do the needs of our clients. To meet the range of needs, LCP has developed two complementary share plan valuation models: an Actuarial Binomial model and a Monte Carlo model. These models give us the flexibility to value share plans robustly and cost-effectively.
LCP provides tailored specialist support to a variety of clients (from several FTSE 100 listed companies down to AIM listed and private companies) under a number of accounting standards (including IFRS2, FRS20, FAS123, IAS12 and IAS24).
The speed of the change in accounting standards, coupled with the variety of different features incorporated in employee share plans, has resulted in a steep learning curve for companies and advisors alike. We work closely with our clients to identify how they may be affected by potential new issues, provide innovative solutions that best meet their needs and monitor the progress to ensure the solution remains appropriate.
Please contact Matthew Pearlman (020 7439 2266) or Alex Waite (01962 870060) for more information.
For further details read our Briefing Plus.
To read the LCP Accounting for Employee Share Plans Survey please click here.
