The NASPP Blog

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature an interview with Takis Makridis of Equity Methods, who will lead the session “Accounting Principles for Stock Plan Administrators.”  Here is what Takis had to say:

NASPP:  What is a common misperception about ASC 718?

Takis: ASC 718 can feel very arbitrary. There’s a laundry list of “rules” to memorize, which is stressful and contributes to the feeling that ASC 718 just amounts to a bunch of hocus pocus. Our topic is NOT about reiterating all those rules so that people can memorize them just a little bit better.  Rather, our session is motivated by the view that ASC 718 is not a laundry list of arbitrary rules. Conventions like dynamic forfeiture rates, equity classification versus liability classification, deferred taxes, and the floor provision tie back to a conceptual framework in accounting. Our goal is to share key aspects of that conceptual framework—which is far bigger than ASC 718—so that all the ASC 718-specific conventions can be understood as existing within a broader accounting policy ecosystem. By understanding the concepts that lead to the rules, our hope is that the rules are not only easier to implement, but also that grey areas can be more readily resolved. This is how we hope to make our presentation different and meaningful.

NASPP:  What actions should companies be taking now?

Takis: Companies should take a careful look at their accounting calculations and procedures with an eye toward WHY things are being done the way they are. Link every calculation back to a principle in ASC 718. When there is not a clear principle to link to (e.g., an elaborate performance-based award), what is the reasoning and documentation in support of the current approach? Does it make sense in light of the accounting concepts underpinning ASC 718? “We do it this way because we’ve always done it this way” can be a very dangerous strategy.

NASPP:  What is the silver lining to ASC 718?

Takis: ASC 718 makes a lot of sense! <Cringe> ASC 718 is much more “principles-based” than many other standards in US GAAP. Of course the standard is filled with rules, but an effort was made to base those rules off fundamental accounting principles. When you can see the rules as stemming from the broader concepts underlying US GAAP, it becomes much easier to resolve complex cases involving a lot of grey and no specific guidance.

NASPP:  What is something you learned from the NASPP?

Takis: The NASPP does an incredible job of bringing experts together from very different disciplines. This is extremely cool and also rare, but it leads to far more holistic perspectives. When we all leave the Conference and go back to “the real world,” it’s essential that we have the tools to look at unique problems holistically, and I feel the NASPP has challenged me to do that in a productive way.

Don’t miss Takis’s session “Accounting Principles for Stock Plan Administrators” at the NASPP Conference!

About the NASPP Conference
The 22^nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!