ASC 718 is the stock-based reporting standard that every founder needs to know and follow. ASC 718 is utilized to expense the fair market value of these awards in your income statement as compensation when you give equity to your workers, advisers, and other stakeholders.

1. What is ASC 718?
ASC 718 is the standard accounting method
used by companies to “expense options,” or
recognize the transfer of value involved in
awarding stock options and other types of
equity compensation to employees

2. Types of ASC 718
1
2
3
718-10 Overall
718-20 Awards
Classified as
Equity
718-30 Awards
Classified as
Liabilities

3. Types of ASC 718
4
5
6
718-40
Employee Stock
Ownership Plans
718-50
Employee Share
Purchase Plans
718-740 Income
Taxes