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Thread: Article on Valuing Stock Options As Compensation

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    n00b Accountants CPA Hartford is on a distinguished road
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    Default Article on Valuing Stock Options As Compensation

    Accountants CPA Hartford: William Brighenti, Certified Public Accountant, Certified QuickBooks ProAdvisor, has made an article explaining and illustrating the Calculated Value Method of SFAS No. 123R, used to value stock options of non-public companies as compensation to employees. The article is available on the following website for all those interested: The Calculated Value Method of SFAS No. 123R: Explanation and Illustration. If you have any questions, comments, or suggestions, please contact us at Accountants CPA Hartford: William Brighenti, CPA.

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    Moderator Helse is on a distinguished road Helse's Avatar
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    Yes, (exclamation) I need this article.

    LLC, LP, LLP Context

    (Readers remember: LLCs surpassed stalwart Corporation as most numerous entity)
    To the above forum member. Helse requests a dialogue relating to present and future
    options to purchase partnership entity equities in exchange for services. Example:
    Newco LLP grants $100,000 service option, payable in 12 parts over 1 year, to accountant
    for services in calendar year. Is Corporation analysis applicable to partnership if
    option is for future services?

    Corp Stock or LLC Shares
    By analogy the "stock" option valuation may help to solve a long standing "dispute"
    between Helse, Zahid and Pat. We are not arguing, merely stalled on budget vs. tax
    and securities valuations. If we declare LLC share immediate value, federal and state employment
    and income tax is triggered. Pat and Helse are yet to reconvene our discussion relating
    to treatment of so-called "evergreen" options.

    Booking LLC Future Interests Exchanged for Services
    (Readers remember: Obamacare's 10% tax will mimic FICA worker classification rules)
    If LLC distributes option to purchase LLC shares (stock) how shall we treat option
    price if option strike prices are "out of the water" (exceed current market value of
    LLC interest.

    Merci for link and eagle eye poster.
    Last edited by Helse; 09-21-2009 at 08:04 PM.
    http://www.accountingblock.com/avatars/helse.gif?type=sigpic&dateline=1271928550

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    n00b Accountants CPA Hartford is on a distinguished road
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    Options cannot exceed current fair values, and how were these current values determined? I'm confused, sorry. If I understand you correctly, I would use the values according to the model in the calculated value method and then discount for time value, which shouldn't be much with these low interest rates. If I am misunderstanding you, please reply.

    Accountants CPA Hartford, William Brighenti, Certified Public Accountant

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