The NASPP Blog

Tax accounting is one of the most complicated areas of equity compensation. Just the name alone makes some of the most seasoned stock plan professionals I know uneasy. It’s also a subject that doesn’t get as much exposure as some of the other disciplines in this profession, which can make it more challenging to be proficient at. We recognize all of this and want to give you an opportunity to enhance your knowledge in this area–round out your resume so that it includes a place for “skilled at tax accounting.”

If this is an area you’ve neglected until now for the reasons I mention above, here is your chance to change this. The NASPP recently announced its newest online educational program, Financial Reporting for Equity Compensation, and two full hours of this course are devoted to understanding tax accounting–soup to nuts. That’s right, TWO full hours of tax accounting!

While I can’t divulge all the great information to be covered in this session, I’d like to give you a sneak peak of some of it. Here are three key topics that will be covered during this session:

1. The tax provision and equity compensation. A tax provision is a company’s current payable for the tax return and its deferred tax asset/deferred tax liability. The most important part of the tax provision is the effective tax rate; the company’s statutory tax rate. The types of awards you grant can affect the tax provision by way of the effective tax rate. How awards impact the tax provision depends on the type of arrangement. To help you understand this, speakers will walk through the fundamental principles of the tax provision as it relates to equity compensation so that you can anticipate the tax implications of the awards you grant.

2. Identifying tax differences. Do you know what permanent and temporary differences are and how they are accounted for? ISOs and ESPPs, for example, are considered permanent differences for tax purposes and are accounted for much differently than temporary differences. They can also adversely impact your financial statement. Learn why this is during this session.

3. Deferred tax assets and the income statement. Validating DTAs that appear on your income statement related to your stock plans is something all companies need to be doing. This proves to your auditors that you are recognizing tax benefits in your income statement for your stock plans in the right period. Speakers will offer two ways to help you prove out your stock related deferred tax assets and offer advice on how frequently you should be performing this audit. Before they do this, though, they will provide you with a complete tutorial on what is a deferred tax asset and more.

Intrigued? Want to know more? Tackle this topic head on now by registering for Financial Reporting for Equity Compensation. NASPP members that register by April 29 can save $250.

 -Robyn