The NASPP Blog

Today I discuss two completely unrelated, but blog-worthy, developments: 1) A recent development in the accounting treatment of share withholding under IFRS 2 and 2) Updated electronic filing specifications for Section 6039 returns.

Share Withholding: The More Things Change, the More They Stay the Same
We received an alert from PricewaterhouseCoopers reporting that the interpretations committee of the IASB, or IFRIC, recently met to consider the accounting treatment of share withholding transactions.

As I’m sure our readers are aware from the numerous memos posted in our IFRS 2 Portal, share withholding is subject to liability (mark-to-fair value) treatment under IFRS 2. This is a significant divergence from U.S. GAAP, where liability treatment is not required. According to the NASPP’s 2010 Domestic Stock Plan Design Survey, over three-fourths of respondents indicate that share withholding is used to cover the taxes due on more than 75% of RS/RSU transactions.  That’s a lot of companies that are going to be subject to share withholding once IFRS 2 is required in the United States (and that may already be subject to it for their foreign subsidiaries). 

The good news is that this issue is on the IFRIC’s radar, but the bad news is that they decided they couldn’t do anything about it. They’ve referred the matter up to the IASB for consideration. Stay tuned… 

Electronic Filing Specs for 6039 Returns
The IRS has finally updated Publication 1220 with the specifications for electronic filing of Forms 3921 and 3922, which will be used to file the returns required for ISOs and ESPPs under Section 6039. (I know the cover says it was updated in July, but the update wasn’t posted to the IRS website until August 26, so I’m not as late with this announcement as it looks).

If you are planning on creating your own files for electronic filing (rather than outsourcing this) or if you are a service provider that will be creating these files for your clients, you’ll want to get cracking on the files right away. Test filings can only be submitted in the fourth quarter of the calendar year–if you wait until the last minute, i.e., the March 31 deadline, you won’t be able to submit a test filing.

Thanks to Elizabeth Dodge of Stock & Options Solutions for letting us know that Publication 1220 has been updated and for the information on test filings.

It’s Here (Almost)!
It’s hard to believe, but the 18th Annual NASPP Conference is just a week out.  With Conference registrations going strong–on track to reach nearly 2,000 attendees–and Say-on-Pay looming, you don’t want to be caught unprepared as we head into 2011. There’s still time to register but don’t wait any longer. 

NASPP “To Do” List
We have so much going on here at the NASPP that it can be hard to keep track of it all, so I keep an ongoing “to do” list for you here in my blog. 

• Register for the 18th Annual NASPP Conference before it’s too late! 
• Complete the Compliance-O-Meter quiz on ESPP Design.
• Take the “Question of the Week” challenge.
• Renew your NASPP membership for 2010 (if you aren’t an NASPP member, join today).
• Don’t miss your local NASPP chapter meetings in the Twin Cities and Wisconsin.

– Barbara