Get a sample on Financial statement analysis explaining how equity investors have the objectives to know the business future earning capacity, growth potential and security of their holdings. All the investors are very much interested to get higher amount of returns. Therefore, they make risk and return analysis associated with their invested funds. Lenders such as bond investors have the objectives to know the short term as well as long term solvency of the business (Bushman and Smith, 2001).
Meaning
Purpose
Forms of presenting comparative statement
Comparative Balance Sheet
Advantage of comparative balance sheet
Format of comparative balance sheet
Illustration
Exercise
Comparative statements of profit & loss
Objective of comparative statement of profit & loss
Format of comparative statement of profit & loss
Illustration
Exercise
Fisconti Tax Consulting Netherlands - New Transfer Pricing Documentation requ...Guido Van Asperen
In the Netherlands new transfer pricing documentation rules are introduced. They will have an impact on companies with a global consolidated turnover of € 50 million
Fisconti tax consulting Netherlands - New Transfer Pricing Documentation Req...Guido Van Asperen
New Transfer Pricing Documentation Requirements have been introduced in the Netherlands in 2016. If you are part of a multinational with a turnover of at least € 50 million, these rules will generally be relevant to you. We provide a pratical approach avoiding duplication of work, considering similar requirements in other countries.
Get a sample on Financial statement analysis explaining how equity investors have the objectives to know the business future earning capacity, growth potential and security of their holdings. All the investors are very much interested to get higher amount of returns. Therefore, they make risk and return analysis associated with their invested funds. Lenders such as bond investors have the objectives to know the short term as well as long term solvency of the business (Bushman and Smith, 2001).
Meaning
Purpose
Forms of presenting comparative statement
Comparative Balance Sheet
Advantage of comparative balance sheet
Format of comparative balance sheet
Illustration
Exercise
Comparative statements of profit & loss
Objective of comparative statement of profit & loss
Format of comparative statement of profit & loss
Illustration
Exercise
Fisconti Tax Consulting Netherlands - New Transfer Pricing Documentation requ...Guido Van Asperen
In the Netherlands new transfer pricing documentation rules are introduced. They will have an impact on companies with a global consolidated turnover of € 50 million
Fisconti tax consulting Netherlands - New Transfer Pricing Documentation Req...Guido Van Asperen
New Transfer Pricing Documentation Requirements have been introduced in the Netherlands in 2016. If you are part of a multinational with a turnover of at least € 50 million, these rules will generally be relevant to you. We provide a pratical approach avoiding duplication of work, considering similar requirements in other countries.
Finit - Creative Solutions for FX Analysis in HFM finitsolutions
Finit is honored to host this upcoming joint webinar with our client, YUM! Brands, Inc. Yum! Brands, Inc., based in Louisville, Kentucky, has over 44,000 restaurants in more than 135 countries and territories, Yum! Brands was named to the Dow Jones Sustainability North America Index and among the top 100 Best Corporate Citizens by Corporate Responsibility Magazine. The company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development. Jill Baker from Yum! Brands and Mary Chan from Finit will be presenting Creative Solutions for FX Analysis in HFM.
For companies that have local, functional currencies different from the corporate reporting currency FX impact analysis or Constant Rate Analysis may be a simple translation. But many companies today have more complex needs when it comes to FX Analysis. What if your entities submit financial data in the company's reporting currency but operate in a different local currency? For example, an entity in the Czech Republic may have a functional currency in EUR even though the local currency is in CZK. How do you perform FX impact analysis or Constant Rate Analysis for this entity easily in HFM? Yum! Brands has tackled the solution for this in various ways, from the mundane manual calculation in Excel to two different automated creative ways in HFM. In this webinar we will share with you the creative solutions our team and the Yum! Brands team collaborated on to automate translations in HFM.
The webinar will include:
Specific Business Requirements
Application Design Considerations
Setting up the HFM metadata and rules to solve the problem
Execution and end user experience and benefits
Pros and cons of the different options
Presenter: Mary Chan & Jill Baker (Yum! Brands)
Date: 02/23/2018
The Age of Alignment Part III: Moving From Theory to PracticePearl Meyer
This series is designed to explore a fundamental question that was raised by the NACD Blue Ribbon Commission on Strategy Development: “Does your company’s incentive structure reinforce or unintentionally undermine its chosen strategy?”
Parts 1 and 2 – which are available for replay – outlined a number of diagnostic tools and approaches that boards can use to uncover potential misalignment between their strategy and the compensation program design. We’ve also looked at various protocols that can help improve alignment and drive toward desired goals.
As we know – protocols cannot anticipate every situation. The fresh news on the proposed SEC rules regarding pay for performance disclosure is a perfect example!
I’m joined today by Jim Heim and Theo Sharp, both managing directors in the Boston office of Pearl Meyer and Partners and today we’re going to talk about some real-world examples that show how companies have put these smart theories and protocols into practice and how they’ve remained disciplined toward strategy execution but also flexible to accommodate the unexpected.
GEO NECF 2015 - Best Practices and Trends in Financial ReportingAndrea Huck-Esposito
Financial reporting for equity compensation is not a new topic. However, developments in the complexity of the types of awards offered combined with vagueness in guidance has resulted in an evolution of best practices in financial reporting. Attend this session and hear how best in class companies are currently handling their financial reporting as a result. Get tips for how to handle your financial reporting dilemmas—whether in a system or in excel. What’s more, hear all about the latest trends in award design that are causing financial reporting issues and how best to address these. Financial reporting for equity compensation will never be easier!
Equity Compensation: End-to-End Strategies for Private CompaniesRoseRyan
How you design and execute your equity compensation plan has significant impacts on many areas of your business, including employee retention, market valuation and readiness for an exit event. These slides by legal, HR and accounting experts in Silicon Valley show you how to set yourself up for success, avoid common pitfalls and plan for an M&A deal or IPO and are drawn from a RoseRyan seminar.
Overview, Techniques, Ratios and LimitationsCarlos B. Stei.docxLacieKlineeb
Overview, Techniques, Ratios and Limitations
Carlos B. Steinblock · [email protected]
Financial Reporting & Analysis
Recap
● The Income Statement
○ Net Sales · CoGS · Gross Profit
○ Operating Expense · Operating Profit
○ Other Income (Expense) · Equity Earnings
○ EBIT & Effective Tax Rate
○ Special Items · Net Earnings · EPS ·
Comprehensive Income
Agenda
● The Cash Flow Statement
○ ‘Cash is King’
○ Basic Principles - classification
○ Direct vs Indirect Method
○ Calculating CF · some examples
○ Analyzing CF
Cash Flow Statement
● reports the cash generated and spent during a specific
period of time (e.g., a month, quarter, or year). The
statement of cash flows acts as a bridge between the
income statement and balance sheet by showing how
money moved in and out of the business.
...https://corporatefinanceinstitute.com/resources/knowledge/accounting/statement-of-cash-flows/
Cash is King
Purposes of the CF Statement
The statement of cash flows assists investors, creditors, and others in
assessing such factors as:
● The company’s ability to generate positive cash flows in future periods
● The company’s ability to meet its obligations and to pay dividends
● The company’s need for external financing
● Reasons for differences between the amount of net income and the related net cash
flows from operating activities
● Both the cash and noncash aspects of the company’s investment and financing
transactions for the period
● Causes of the change in the amount of cash and cash equivalents between the
beginning and the end of the accounting period.
Basic Principle
The statement of cash flows is, in reality, another way of
presenting the balance sheet of a company; except in the
case of a balance sheet, which shows amounts at the end
of the accounting period, the statement of cash flows
shows the changes in the balance sheet accounts between
periods.
Basic Principle
The change in cash between periods is explained by the
changes in all the other balance sheet accounts, and each
balance sheet account is related either to an operating activity
(e.g., accounts receivable, inventory, accounts payable, net
income in the retained earnings account), an investing activity
(e.g., purchase or sale of property, plant, and equipment), or a
financing activity (e.g., borrowing and repaying debt).
CF from operating activities
CF from investing activities
CF from financing activities
CF Statement
Exercise
Exercise
Exercise
Direct vs Indirect Method
Firms may use one of two methods prescribed by the Financial Accounting
Standards Board (FASB) for calculating and presenting cash flow from
operating activities: the direct method and the indirect method. The direct
method shows cash collections from customers, interest and dividends
collected, other operating cash receipts, cash paid to suppliers and
employees, interest paid, taxes paid, and other operating cash payments.
The indir.
Senior Manager in Finance and Accounts with 16+ years of exposure in all areas such as P2P, R2R, O2C, Financial statements, Transition, Transformation projects, Project management, Stakeholders relationship
Classification of budget according to Time, Function and Flexibility. Long term budget, Short term budget, Long term budget, Short term budget, Sales budget, Production budget
Similar to Employee Stock Option Exchange Programmes - StepStone Case study (20)
Employee Stock Option Exchange Programmes - StepStone Case study
1. Effective Administration and Accounting for
Option Exchange Programs
Martin Percival, Group HR Director, StepStone ASA
Renee Bomchill, Partner, Deloitte & Touche LLP
Finn Dahl, Chief Operating Officer, Norse Solutions AS
Chicago – April 2010
2. Agenda
• Who are StepStone and Norse Solutions
• What are option exchange programs
• Why and when to exchange
• Case Study – StepStone exchange program 2008/9
• Considerations and impact of exchange program
• Internal processes - StepStone
• Accounting for share option exchange program in accordance with IFRS
• Working with your software provider for a smooth exchange
• Lessons learned/Q&A
*Tax and securities laws are not considered in this presentation
3. Who is StepStone
• Founded in Norway in 1996
• A European internet job board pioneer
• Listed on the Oslo stock exchange at IPO in 2000
• Co-founders of “The Network” in 2002 – an alliance of 36 job
boards covering over 100 countries
• StepStone Solutions founded in 2003
• Via acquisition of EasyCruit (Norway - 2004), i-GRasp (UK –
2005) and ExecuTrack (Germany - 2007) became the leading
European HRIS/Talent Management software provider
4. Who is Norse Solutions
• Founded in 2002 with background and experience in
development of finance- and accounting software since 1986.
• We are the largest supplier of software and services related to
IFRS 2 in Northern Europe and ranked #183 on Deloitte’s EMEA
Fast 500.
• Our customers are located in 11 countries and have employees
in 65+ countries.
• We offer full or partly outsourcing of administration of equity
based payment programs using Norse Options™ as platform for
the service.
• Norse Solutions cover all activities related to corporate finance,
accrued payroll taxes, DTA calculations, accounting, reporting
and disclosures, HR-functions as well as information to and
interaction with employees and financial institutions.
5. What are option exchange programs
• Option holders surrender their outstanding options in exchange
for new awards.
• New awards can be in the form of:
• New option grant
• Grant of restricted stock
• Cash settlement
or a combination of the above
• An option exchange process may require the participation and
dialogue between:
• HR
• Legal
• Accounting
• Tax
in addition: the board, shareholders, auditors, proxy advisors etc.
6. Why and when to exchange?
• Options are underwater, i.e. strike price below current market price.
• What are the reasons for options being underwater
• Are the options likely to go back in the money sometime soon?
• Employee retention and motivation
• Exchange underwater options to lessen risk of key employees moving to
competitors and then grant options to new hires at today’s market price.
• By allowing employees to exchange underwater stock options for new stock
options with exercise price at current market value, the stock option plan would
again provide the incentive and retention value that it was designed to provide.
• Cash situation makes some companies rely heavily on equity
incentives for motivation and retention enhancement
• Lack of sufficient share reserves under the plan
• Reduction of stock options outstanding to keep in line with market
trends.
7. StepStone’s original stock option program
• The existing stock option program was re-issued in 2002.
• Allocated quarterly and vested 1/16th every quarter
According to IFRS 2, each grant is valued separately resulting in a large
amount of transaction for longstanding employees.
• Strike price set equal to market value at grant, range from
NOK 2 – NOK 155.
• Over 1200 employees (and ex-employees) have passed through
the stock option system and received one or more allocation of
options.
8. Internal processes of StepStone - 1
• These evolved over the years as Company changed from a Western
European/Nordics internet job board focused business to a global Talent
Management focused software company
• 450 employees at end of 2006, 967 at end 2008
• In final years the stock option process became more streamlined and
Allocation bands were re- designed upon industry wide common job
levels and bands used for compensation benchmarking purposes
• Impact = simplified the process considerably as grants were no longer
based on job-titles but level of contribution to the company, i.e. individual
contributor, first line manager, senior manager, Director etc.
• Grant process became simpler and more consistent
9. Internal processes of StepStone - 2
• Board approved quarterly allocation of grants to individuals
subject to proxy given by Shareholders at AGM.
• All grants were always at board discretion and this was always
made very clear to employees.
• Tended not to “sell” StepStone heavily to new employees on the
basis of stock options
• Board approval given for the re-price
• Grant details entered into Norse Options & employees advised of
their allocation and invited to view their account in Norse Options
11. StepStone’s historical stock price
Tremendous growth in stock price from 2005 - hit hard by the 2008
financial crisis
12. Considerations and impact of exchange
• Alternatives - offer other instruments, RS or cash settlement
Options
• Familiar with options
• No cash outlay
• Retains incentive and retentive value
Restricted Stock
• Protects against future drops in stock price
Cash settlement
• Easy to explain
• No retentive value (unless subject to vesting conditions)
• Cash outlay by the company
• Balance the needs of employees and shareholders
• Exchange ratio
• New strike
• Value for value
• New vesting requirements
• Block-out period
13. Considerations and impact of exchange
• Strike price of new options
• Stock option pool
• Cancelled options available for new grants?
• Include Executives?
• Accounting consequences
• Administrative issues
• Employee communication and education
• Does your software provider support such option exchange
• Option exchange window
• Exchanging fractional grants
• Eligible employees / eligible options
• Tax consequences
• Regulatory requirements
14. Key features exchange program
• Type of program
• Options-for-options exchange on a grant by grant basis
• Allowed for exchange of partially exercised grants
• Participation
• Executives included as stock price decline caused by external factors
• Strike price
• Set at market value
• Exchange ratio
• 2:1
• Vesting schedule
• Vesting re-started and lock up during the first 12 months
• 4/16ths vest after 12 months, thereafter 1/16th each quarter
• Term
• All new stock options have a new 10 year term
27. Working with your software provider
Administration advice
• Ensure that initial data input into the system is 100% clean and that your
software provider has a good base of information to work from.
• Clearly communicate the basis of the exchange process in a timely
fashion to employees to ensure that sufficient time is allowed for the
exchange process to be initiated within the system
• Consider impact on exercise and reporting periods (if relevant).
• Provide Guidance and FAQ information to employees.
• Translate these if possible
• StepStone’s timeframe did not allow for website election
• StepStone collected acceptances and provided elections to Norse Solutions
in form of Excel spreadsheet.
• If time permits, provide tender offer website for the employees.
28. Working with your software provider
Accounting
• StepStone has reported under IFRS 2 since 2005.
• Norse Solutions software is transaction based, and grants are
valued tranche-by-tranche according to IFRS 2.
• Norse Solutions handles re-pricing of grants. Re-pricing of 16
outstanding tranches was thus straightforward using the
modification date assumptions.
• Special treatment required where part of the grant/tranches had
been exercised. E.g. 7 tranches were exercised, and 9 remaining
tranches to be modified into 16 new tranches.
• Solution was to re-price 9 tranches, then adjust the quantity in those 9 tranches
and allocate them the 7 ”new” tranches.
• Led to a small and not significant timing issue of expensing, approved by auditor
in advance.
• Software provides modification accounting.
29. Working with your software provider
Audit trail
• All journals should be clearly identified within the system with a
description of what is being performed within that journal and by
whom.
• All transactions should be tagged with Grant reference
• Grant ref. enables user/auditor to pull all transactions connected to one
award.
• Facilitates the audit and recalculation of grant modification.
30. Working with your software provider
Disclosures and notes to reports
• Activity report
• How to clearly display the changes due to option exchange?
• “Weighted average fair value of options granted during the period”
• How to accurately display the incremental expenses of option exchanges
• Only incremental FV?
• Full FV?
• Don’t include but disclose incremental FV in separate section?
• Outstanding options
• Must show status at period end, adjusted quantities, new strikes, remaining life etc.
• Option Plan overview
• Cancelled options to revert to plan pool ?
• Norwegian Stock Exchange rules required that all changes to stock option
scheme had to be communicated
31. Important considerations
• Consider an economic exchange, not a one-for-one swap
• Re-start vesting or impose a black-out period
• Consider the potential accounting impact
• Confirm whether you require shareholder approval
• Ensure compliance with local regulations for international
employees
• Involve HR, Accounting, Legal and software vendor at an early
stage
• With the benefit of hindsight, what could have been done
differently?
32. Q&A
Martin Percival
Group HR Director, StepStone ASA
martin.percival@stepstonesolutions.com
Renee Bomchill
Partner, Deloitte & Touche LLP
rbomchill@deloitte.com
Finn Dahl
Chief Operating Officer, Norse Solutions AS
finn.dahl@norse-solutions.com
33. Appendix: StepStone Timeline 2002 - 2010
30
May 2002 new stock option plan issued
Sept 2002 acquires Careerportal (Netherlands)
Feb 2003 StepStone & Hire.com partner for Europe
April 2004 Board approve 20:1 share split
25
May 2004 split initiated
Sept 2004 Axel Springer acquire minority interest in StepStone Deutschland AG
Oct 2004 acquires Easycruit (Norway)
Jan 2005 acquires Obvious Solutions (United Kingdom)
July 2005 acquires i-GRasp (United Kingdom)
20
Oct 2005 StepStone & Norse Solutions sign contracts for provision of services
Dec 2005 acquires Jobbsverige (Sweden)
Dec 2005 first batch of new stock option grants entered into Norse
July 2006 acquires IT-Jobbank (Denmark)
Nov 2006 acquires Jobfinder (Austria)
15
Dec 2006 acquires ExecuTrack (Germany, UK and Switzerland)
July 2007 acquires Recruiter Norge (Norway)
Feb 2008 acquires Statsjobb (Norway)
July 2008 acquires Les Villages Emploi (France)
Nov 2008 resumes trading on the London Stock Exchange
10
Dec 2008 Axel Springer acquire 33.3 shareholding in StepStone ASA
Dec 2008 Board approves re-pricing of employee stock options to NOK 3.51 due to
market conditions and worldwide financial crisis
Dec 2008 all communications regarding re-pricing sent to employees within 10 days
Mar 2009 Norse Solutions complete project to re-price options to NOK 3.51
5
April 2009 new stock option grant ranges introduced
Sept 2009 Axel Springer increases holding in StepStone ASA to 52%
Dec 2009 Axel Springer completes acquisition of all outstanding shares in StepStone ASA
Dec 2009 StepStone delists from Oslo Stock Exchange
Dec 2009 Employees who have options under NOK 9 invited to participate in accelerated
0 stock programme as no market now exists for stock options
Nov-02
Nov-03
Nov-04
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
Feb 2010 Norse Solutions complete system administration of accelerated stock options
May-02
May-03
May-04
May-05
May-06
May-07
May-08
May-09
34. About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and
its network of member firms, each of which is a legally separate and independent
entity. Please see www.deloitte.com/about for a detailed description of the legal
structure of Deloitte Touche Tohmatsu and its member firms. Please see
www.deloitte.com/us/about or a detailed description of the legal structure of
Deloitte LLP and its subsidiaries.
This presentation contains general information only and Deloitte is not, by means
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tax, or other professional advice or services. This presentation is not a substitute
for such professional advice or services, nor should it be used as a basis for any
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